Welsh Affairs

HC Deb 25 February 1982 vol 18 cc1015-72 5.23 pm

Mr. Geraint Morgan (Denbigh)

After the fiery polemics of the right hon. Member for Rhondda (Mr. Jones) I shall turn to a more peaceful scene. No doubt because of the multiplicity of the subjects with which he had to deal, my right hon. Friend the Secretary of State did not find time to say anything about the important subject of agriculture. I hope that the right hon. Member for Rhondda will not accuse me of being a sycophantic Back Bencher if I do not criticise my right hon. Friend for not speaking for longer than he did.

It is hardly necessary for me to remind the House of the important part that agriculture plays in the Welsh economy. Indeed, Welsh agriculture plays an important part in many aspects of British agriculture out of all proportion to our population and area. Welsh agriculture is dominated by livestock production. The sheep breedng flock represents some 25 per cent. of the United Kingdom total. Welsh farms carry nearly 13 per cent. of the United Kingdom beef herd and we produce more than 10 per cent. of United Kingdom milk. The total value of Welsh agricultural output is about £450 million per annum.

It has been the fate of Welsh farmers, as of farmers in the United Kingdom generally, to have suffered a fall in real and nominal income for some years. It is now estimated to be only one-half in real terms of what it was in 1976. Hill and upland cattle and sheep farms have been especially hard hit. It seems likely that the value of farm output this year will show a rise in nominal but not real terms. The concomitant of the sharp fall in real incomes has been a disastrous fall in the value of investment, which is now at its lowest level for more than 20 years. Between 1980 and 1981 there was a fall of 18 per cent. in investment in plant, machinery and vehicles and of no less than 23 per cent. in building.

In those depressing circumstances, it becomes especially vital that the green pound should not be adjusted to the disadvantage of Welsh and other United Kingdom farmers. That is a real peril, in that that has been recommended by the EEC Commission. If that recommendation were implemented, the benefit of the 9 per cent. increase in farm prices, which has also been recommended by the Commission, will be more that halved for United Kingdom farmers.

I know that I am preaching to the converted when tell my right hon. and hon. Friends on the Front Bench that these proposals- must be strongly resisted, because my right hon. Friend the Minister of Agriculture, Fisheries and Food has said that he intends to do so. I have every confidence that he will resist those proposals as vigorously as he has championed British agricultural interests within the EEC.

Before I leave the subject of agriculture, I make a plea to my right hon. and learned Friend the Chancellor of the Exchequer. I should like to think that I do so with as much confidence as I did to the Minister of Agriculture, Fisheries and Food on the other matter. My plea is for the reduction of the incidence of capital gains tax and capital transfer tax on agricultural holdings. I hope that the Budget will contain proposals not merely for a general reduction but for a general reappraisal of both these taxes, especially capital gains tax.

Capital gains tax has borne especially heavily on agriculture because of the phenomenal inflation of land prices since the oil crisis of 1973. The latest available figures for the three months ending 30 September 1981 show an average price per hectare—I suppose that we must now get used to hectares—in Wales of just over £2,500. That was indeed a slight reduction on the previous three months, when the average price was in excess of £2,500. In broad terms that represents an inflation rate of more than 1,000 per cent. over the past 20 years. That would not be so great a problem if there were an equitable basis for the extraction of capital gains tax, but there is not.

When he became Chancellor of the Exchequer in 1853, Mr. Gladstone was moved to describe income tax as an immoral tax tempting Governments to extravagance and taxpayers to fraudulent evasion. If Mr. Gladstone were with us now, I cannot conceive how forceful an adjective he might use to describe capital gains tax, which is uniquely unjust in that it is based on the quite fraudulent fiction that the pound has the same value today as it hid in April 1965, when, as we all know, its true value is now less than one-fifth of what it then was.

It would be churlish of me not to reflect the appreciation of farmers generally, and especially those in my constituency to whom I have spoken, for such measures of relief as the Government have introduced in this sphere since 1979, particularly in the form of roll-over provisions and exemptions, but all this has essentially been tinkering with the problem. The time has now surely come when the Government can no longer avoid addressing themselves to the core of the matter—the basis on which the tax is to be exacted, if indeed it must be retained at all.

I have never been impressed by Treasury objections to tapering or indexation, but if my right hon. and learned Friend the Chancellor remains immovable with regard to those two solutions, I hope that he will not reject other, albeit to my mind less satisfactory, solutions such as introducing as a base the level of land prices and asset values which obtained in, say, 1975.

It was particularly appropriate that my right hon. Friend the Secretary of State should refer to the Welsh language, as the last parliamentary Session saw a painstaking investigation into Welsh language broadcasting by the Select Committee on Welsh Affairs. In addition, the first detailed results of the 1981 census seem to show that the speaking of the language continues to decline in most areas, although there has been a small but encouraging increase in the number of Welsh speakers in the two counties where one might least expect it, where the language has traditionally been weakest for the better part of a century—South Glamorgan and Gwent. Overall, however, in the past decade there has been a 2 per cent. decrease, which the language could ill afford.

If one looks back to the beginning of the century, or even just three decades to 1951, the seriousness of the decline becomes even clearer. The figures are stark. In 1911 Welsh speakers numbered not far short of 1 million. By 1951 the number had fallen to fewer than three-quarters of a million. By 1971 it was just over half a million, and the present number is almost certainly less than that figure. In short, the number of Welsh speakers is now about half what it was at the beginning of the century.

Whatever may be said in criticism of the Westminster Parliament's attitude to the Welsh language in years gone by—and much could probably be said in that context—no one can deny that Governments of both parties have made substantial contributions to its well-being in the past two decades.

I need not recite all the achievements on behalf of the language during that period. I will mention just two examples. The 1967 Act granted official status to the Welsh language. Then, about six years later, at considerable cost—some £4 million—there was the provision of Welsh road signs.

The determination to continue to give the language all possible support is evidenced by the generous grants made by the Government in the current financial year to the various organisations concerned with its survival and wellbeing. Those grants are not just far higher than any made under any previous Government, but show a marked increase over those for the previous financial year—well over £1-5 million, compared with just under £1 million in the preceding year—and this at a time of acute financial stringency.

The great "make or break" effort on behalf of the Welsh language will, of course, be the introduction of the Welsh fourth channel. I hope and believe that the Government will give this historic venture every chance and will adopt a generous and sympathetic attitude when they review its performance after three years. There will certainly be teething troubles, and it may take some time to get established, but there is no reason why it should not eventually be just as successful as Radio Cymru, despite the prophesies of doom of the Jeremiahs who always seem to flourish on these occasions. Of one thing I am sure—if it does not succeed, in all probability all our efforts and expenditure on behalf of our ancient language will have been in vain. So let us do everything humanly possible to ensure that it does not fail.

I wish to deal briefly with the Government's road building programme in Wales. A memorandum from the British Road Federation, which I think all hon. Members have received, emphasises, if emphasis were needed, the important economic benefits which flow to an area as a result of major road investment, in terms of increased industrial development potential, improved access to markets and suppliers, increased tourism potential, and so on. One statistic produced by the federation epitomises the beneficial effect since 1966 of the extension of the M4 and the building of the Severn bridge. A survey of 97 new firms in Gwent showed that almost four-fifths of them had been influenced by the motorway in their choice of location and that just over half of them regarded its availability as a major consideration.

Unhappily, North Wales has been the poor relation for many years in this respect. We have not one centimetre, let alone a good British inch, of motorway. Our principal and modest plea has been for the dual-carriagewaying of the A55. At long last, however, it is a matter of some comfort to us that, of the total Welsh road expenditure budget for the current financial year, by far the greatest allocation has been made for improvement of the A55. In time, this will make North Wales far more attractive to incoming industry generally. It will also be of particular value to tourism, which is assuming an ever-greater importance in our economy.

I congratulate my right hon. Friend the Secretary of State on his present concentration on improving the A55, but I beg him not to rest on his laurels when the work is completed but to direct his attention to other important routes in North Wales and especially to the A5, to which virtually no improvements—certainly none of any magnitude—have been effected in the past 20 years.

Mr. Nicholas Edwards

My hon. and learned Friend will appreciate that the important motorway link across England to the A5 is now under way and will be of considerable importance to North Wales.

Mr. Morgan

I appreciate that, but it does not detract from what I said about lack of work on the A55 for 20 years.

I regret very much that there is one last issue to which I must refer, but, as it is a topical matter in the Principality this week, it would be wrong to avoid doing so. I refer to the final vote of the Welsh counties, that of the county of Clwyd in which most of my constituency lies, declaring its area to be a nuclear-free zone. Frankly, I can find no adjective less strong than "irresponsible" adequately to describe the votes to that end of successive Welsh county councils. I cannot think that they truly represent the views of the Welsh people as a whole. I doubt whether more than a tiny number of those councillors were elected on what must be regarded as a unilateralist platform.

One public opinion poll after another has shown that the British people as a whole, by a very large majority, wish Britain to remain an effective member of NATO and to retain the nuclear deterrent as the surest way to safeguard the peace that we have managed to preserve, at any rate in Europe, for upwards of 35 years. I cannot think that Welsh opinion is basically different from that of Britain as a whole on this issue. After all, only three years ago the Welsh people voted by an overwhelming majority for Wales to remain an integral part of the United Kingdom.

I have heard it said that many of the councillors who voted to make their counties so-called nuclear-free zones did so only as a symbolic gesture, believing that the legal effect would be virtually nil anyway.

Mr. Tom Ellis

I am sure that the hon. and learned Gentleman will agree that the Welsh people did not vote on the question of remaining an integral part of the United Kingdom.

Mr. Morgan

What else did they vote for in the referendum?

Mr. Tom Ellis

The devolution referendum had nothing to do with Wales' separation from the United Kingdom. It would have remained firmly within.

Mr. Morgan

That strengthens my point. Wales did not even want to have a local Assembly. It wanted to be governed from Westminster. That is the point that I am making.

If the vote for so-called nuclear-free zones was a symbolic gesture, it was one that the Western Alliance could well have done without at a time when the Soviet Union has bared its teeth, directly in Afghanistan and, by proxy, in Poland. Its effect will assuredly be to confirm would-be aggressors in the belief that we are not prepared to resist aggression.

Mr. Hooson

Will my hon. and learned Friend confirm that it is not the county councils' business to concern themselves with either defence or foreign policy?

Mr. Morgan

I said so in Welsh on television last night.

Mr. Keith Best (Anglesey)

Say it again.

Mr. Morgan

I shall say it again, but not in Welsh, as that would, unfortunately, be out of order.

Many hon. Members are old enough to remember the disastrous effect of similar symbolic gestures by organisations like the Peace Pledge Union in places like the Oxford Union before the Second World War. My only hope is that those who voted in that way will speedily realise what a Pandora's box they may have opened. There have already been threats, publicly uttered, to force my right hon. Friend the Secretary of State to abandon the civil defence programme for Wales under the threat of a local revolt. There have been threats to block planning applications from the Ministry of Defence, to publish local war plans, to open war bunkers—whatever they may be—for public inspection and even to provide evening classes in what are euphemistically described as "peace studies". I do not suppose that more than a small minority of the councillors who indulged in that exercise believed, or even contemplated, that they might be instigating public disorder. However, their actions have undoubtedly, if unwittingly, given a spur to it.

Finally, may I say a word to the self-styled nationalists who seem to have convinced themselves that small nations like Wales can somehow opt out of things and ignore Western defence as something that does not concern them. It concerns all small nations who still enjoy their freedom, and it concerns them mightily. In the last analysis, it concerns them more than the large nations. Can it for a moment be supposed that if there were a Soviet takeover of Western Europe the new masters would have the least regard for small nations, their languages and cultures? The answer to that question has been provided in a fearful form by the Soviet Union itself in the way that it has treated its national minorities from the Black Sea to the Baltic, in particular, those small nations which it swallowed up within its empire against their will over four decades ago. All those nations have been subjected to deliberate Russification and one, the Tartars of the Crimea, has been the victim of what can only be called a form of genocide.

Let all thinking people in Wales reflect on those things and come to the only sane and logical conclusion, that the twin causes of liberty and peace—for the maintenance of which the Western Alliance came into being—must be given full-hearted support in Wales as everywhere else.

5.44 pm

Dr. Ifor Davies (Gower)

I readily welcome the opening remarks of the hon. and learned Member for Denbigh (Mr. Morgan) and the tribute that he paid to the efficiency of the Welsh agriculture industry. I take advantage of the opportunity to put on record an appreciation of the way in which agriculturists and farmers in my constituency coped during the recent weather crisis.

No debate on Welsh affairs could be realistic unless it concerned itself with the problems of unemployment. Those problems have already been underlined in the debate. The Secretary of State invited hon. Members to join him in singing the praises in a loud chorus of Wales as a good place in which to live and as a good place for new industries. I readily join him in singing that song.

However, as has rightly been stated, unemployment in Wales has reached record figures. We dare not ignore that. A figure of 16.1 per cent. has been cited. My constituency has been badly affected by redundancies in the steel and tinplate industries, and the male unemployment figure stands at 19 per cent. There are many constituencies in Wales with even higher unemployment, and unemployment in the Secretary of State's constituency of Pembroke is between 20 and 25 per cent.

It is surely time that we recognised unemployment for what it is—a moral and social evil of the first order. Our primary aim must be its reduction. There should be a far greater sense of outrage about the truly disastrous level of unemployment throughout the country, which denies our people a fundamental dignity—the right to work. No issue causes graver concern. During the past few months the House has listened to many hon. Members from both sides of the House describe the soul-destroying effects of unemployment.

I welcome the recent declaration by Church organisations involving them with this great problem. The fact that one-third of the total number of unemployed have been out of work for nearly 12 months highlights the long-term seriousness of the problem. It is particularly tragic that unemployment among the young is rising steeply, and the situation of those aged under 18 gives rise to even greater concern. I welcome the reduction in unemployment announced this week although it is small. Any reduction is welcome. However, the underlying trend is still upwards.

Unemployment in Wales cannot be understood in isolation from the trends in the United Kingdom. I recognise at once that the fortunes of the Welsh economy are inextricably linked with those of the United Kingdom. Different parts of the United Kingdom are interdependent and the level of demand in Wales depends on the overall economic climate in the United Kingdom. All that points to the fact that Wales is in urgent need of an active regional policy.

The Conservative Party endorsed that view in its 1979 election manifesto. Page 5 states: An effective and stable regional policy will be needed for the forseeable future. Action speaks louder than words. No sooner had the Conservative Party been returned to office than it systematically proceeded to undermine regional policy by downgrading our structure of development districts and, in many cases, wiping out development areas.

In addition, in many Welsh districts Government training centres have been closed, although retraining facilities have never been more urgently needed, I acknowledge what is being done, but the closure of those training centres is a disaster. Thus, a serious blow has been struck against regional policy. I recognise that regional policy cannot succeed against a background of declining opportunities in the United Kingdom as a whole. Injustice between the regions can be dealt with only by a significant expansion of the national economy and an increase in public expenditure.

In that context it is interesting to note the growing measure of agreement among economists and other leading figures—which is reported daily in the press—that sums of no less then £5 billion should be considered. On 7 December The Times reported that the former chief economic adviser to the Treasury, Sir Brian Hopkins, proposed a £6 billion package to increase demand and to create new jobs. Incidentally, Sir Brian is now a professor at Cardiff university. His view was confirmed in that same report by two other professors.

There can be little argument but that cuts in public spending have contributed towards the recession. Wales has been hit harder because, with two-thirds of Welsh jobs dependent on public expenditure, directly or indirectly, the cuts have been a savage blow.

This morning I received a letter from the Federation of Civil Engineering Contractors, which said: Unemployment in construction is running at about 40 per cent. in the region, with South Wales one of the worst hit parts of the country. I emphasise that in order to counterbalance the rosy picture that was painted by the Secretary of State. I have referred to blows that have been struck against regional policy.

I refer briefly to another blow that has been struck in Wales by Government cuts in higher education. We heard very little about this from the Secretary of State. When educational facilities are lost to children and young people they can never be regained. That is a loss to a generation and a loss for a lifetime. That is why education should have one of the highest priorities in Government expenditure. A lengthy period of increasing financial constraint has been overshadowed by cuts of considerable severity, which have had a particularly grievous effect upon the University of Wales and all its constituent colleges. This has resulted in serious alterations in many departments and a reduction in the number of students.

The long-term future of Britain is threatened by Government plans to cut back on university education. All college principals, without exception, in Wales, as elsewhere, condemn the situation. I can well understand the fierce reaction of students. They also have grounds for protest when they find that their grants are limited to an increase of 4 per cent. this year, which is less than half the rate of inflation. No one argues that students should be kept in a state of luxury, but their prospects of gaining part-time employment, which they used to get in the past, are negligible. The real level of the student grant is the lowest for 20 years. Students therefore have to rely upon the grant, no more and no less, and what, if anything, their parents can afford.

Britain needs more, not fewer, graduates. The constraints on student numbers, with a policy of running down the higher education system, will cause untold harm to society. Above all, the effects on research, which is vital to our future, are particularly damaging.

That opinion was confirmed by none other than Dr. Parkes, the chairman of the University Grants Committee, when he gave evidence on 23 July last year to the Select Committee on Educ4tion, Science and Arts on the question of university funding. In reply to a question on the effect of Government policy he said: I do not find myself able to predict what it will do over the next decade, because I do not know what this or any future Government will do in terms of funding. What I can say is that in the short term it will do serious damage to that education, and also (I wish you would keep this in mind) to the country's research base. These are significant words.

With isolated exceptions, the universites are the only institutions that the country possesses for performing fundamental research. In applied research, where industry has taken advantage of what has been done in the universities, hundreds of millions of pounds have been earned by the exploitation of inventions and by using the skilled assistance provided by universities to solve specific problems.

In that context I can speak with some pride on the position of the University of Swansea. I declare my connection as chairman of the university council. The Royal Society Research Unit which has been established there has recorded significant achievements especially in spectrometry. In addition, the department of zoology has performed notable work in conservation and pollution problems, particularly in Swansea bay and the Barry estuary. Apart from the scientific interest, research in a social sense has resulted in a notable contribution towards the rehabilitation of the Swansea valley project.

I warn the Government that their inflexible attitude, which is criticised even by some of their own supporters, is not only causing profound confusion in education and in industry, but is causing the most profound despair in local government throughout our towns and cities. In addition, the most profound bitterness is felt by our people, young and old. The Government are being urged by both sides of the House to adopt a more reasonable and sensible policy of reflation and investment. In the interests of the people in this country, and in Wales in particular, and in the interests of saving our economy from its desperate condition, I urge the Government to think again.

5.57 pm

Sir Anthony Meyer (Flint, West)

One of the pleasures of having a Welsh debate on the Floor of the House is that we can have a contribution from the hon. Member for Gower (Dr. Davies) who normally has to maintain a benign silence as Chairman of the Grand Committee. We are always pleased to hear from him. Like him, I propose to speak mainly about unemployment. I must observe that during this important debate on Welsh affairs the Benches on the Labour side are conspicuously naked. For most of the time Conservative Members have outnumbered the Labour Back Benchers even with the regrettable absence of my hon. Friend the Member for Barry (Sir R. Gower) who, as we all know, is sick and to whom we all send our good wishes for a speedy recovery.

While I am in this vein, may I also take the opportunity of wishing many happy returns to my right hon. Friend the Secretary of State? I hope that he will be celebrating many more birthdays either at that office or at some even more senior office to which his great talents undoubtedly entitle him. Lest any hon. Member is going to call out "sycophant" I may point out that there was a period not many months ago when my right hon. Friend was not on speaking terms with me.

My constituents are worried about jobs. Those who have jobs worry that they may lose them, particularly if they are over 40. Schoolchildren and their parents worry that they may not get jobs for many years and that by the time they do they will have lost the will to work. My constituents are worried about how they are going to pay their bills for the rates, the water rate, gas, electricity and, on top of all that, the taxman.

What my constituents do not worry about is that some other people have holiday cottages. Still less do they worry that the police are making an effort to catch the yobbos who are burning down the cottages, even if that means putting listening devices in telephone boxes.

People in my constituency do not worry that the poor, downtrodden trade unions are going to be made to behave more like the rest of us by the Government's Employment Bill. Many of them think that the £1 million, which the unions will spend on fighting the Bill and on preventing trade unionists from having the right to vote on whether they should go on strike or on the election of their officials, could be better used to provide new jobs.

I agree with my hon. and learned Friend the Member for Denbigh (Mr. Morgan) that the Welsh people do not sleep any better in their beds in the knowledge that Wales has been declared a nuclear-free zone. I suspect that they believe that neither President Reagan nor Mr. Brezhnev are attentive readers of the Welsh press. I am sure that the Welsh people feel that the declaration is sanctimonious hypocrisy. They will want to know how they were consulted on what has been so pompously announced in their names. It is jobs and the difficulty of making ends meet that worry them, unless they belong to a powerful union or receive an index-linked pension.

The majority of the people of Wales blame the Common Market for everything that has gone wrong. Heaven knows, enough has gone wrong. However, when they stop to think they know that none of our problems would be solved, and most would be made worse, if we pulled out.

If the Welsh people do not blame the Common Market they blame the Government, but they know and admit that life would be much worse under a Labour Government, particularly with the Labour Party in its present state. The Welsh people have been having a lovely dream recently that under the SDP/Liberal alliance everything will suddenly become much better without anything being given up—except, of course, other people's luxuries and the things that no one wants such as party squabbles or confrontations. This dream is best described by the good lady in my constituency who told me that it was important to get out of the Common Market and to bring back capital and corporal punishment and that was why she wanted Roy Jenkins in No. 10.

In common with my constituents, I worry about jobs and about those who are having ever greater difficulty in making ends meet. I refer not only to the very poor, because they receive means-tested benefits, but to those who are slightly above the poverty line and who are frequently worse off than those below it—the elderly, widows with small occupational pensions, and people with incomes from their life savings, after many years of hard work and thrift.

I know that the Government's policies are more likely to bring new jobs and to raise the living standards of the new poor than are the policies of any other party. I know that it is important that they stick to those policies under mounting pressure to let inflation rip and so destroy millions more jobs and place the poor at an even greater disadvantage. However, I wish to high heaven that the Government, and particularly the Prime Minister, would find the words and the tone of voice to convince us that they really care about the hardships that are being suffered by individuals as the nation battles grimly along the road to self-respect.

No one has fought harder in the interests of the people of Wales, in and out of Cabinet, in Europe and in Japan, than my right hon. Friend the Secretary of State for Wales. However, I sometimes wish that his briskness and efficiency did not blind so many people to his real compassion.

In giving unsolicited advice to my youngers and betters, I offer this further piece of advice—vicariously, through my right hon. and hon. Friends on the Front Bench—to my right hon. and learned Friend the Chancellor of the Exchequer. It comes from many of my hon. Friends, including some who have Welsh constituencies. We cannot judge now how much, if any, reflation he can introduce in his Budget. We have taken note of the Prime Minister's pre-emptive strike on Tuesday. However, whatever he intends to do in reducing the amount that would otherwise be taken out of the economy by the taxman, we want to ensure that all of it goes to stimulating real jobs or into easing the plight of those slightly above the poverty line. Whatever pledges the Government give to cut taxes, those who agree with me do not believe that one penny should go towards lightening the tax burden on those lucky enougl, to be in work, the motorists, smokers, drinkers, or any other religious sect.

The next subject of inquiry by the Select Committee on Welsh Affairs will be the effect of the European Economic Community on Wales. I can think of no more appropriate subject, or one where the great mass of detailed evidence that will be accumulated will be more valuable. There is plenty of hard information about the effect of the EEC on the United Kingdon and we can argue one way or the other in the full knowledge of the facts. However, when considering the EEC and Wales we can do little more than extrapolate information from the United Kingdom figures, or use such anecdotal evidence as is available on a totally random basis.

Despite the lack of detailed statistics about the EEC and Wales, certain basic principles surely hold good for Wales as for the rest of the United Kingdom. I shall deal with only two of the principles before speaking briefly on what is an awkward issue in the context of the EEC and Wales—the threat to jobs from EEC competition in such goods as washing machines—before concluding on v. hat to me is the overriding consideration, which is ' the importance of EEC membership for attracting new jobs.

I shall speak only briefly on agriculture because the subject has been so expertly covered by my hon. and learned Friend the Member for Denbigh. There are few farmers who want the United Kingdom to leave the EEC. Their concern is to keep the protection that the common agricultural policy has given them, which is so much more dependable in present circumstances than deficiency payments would be. The sums required for deficiency payments are horrifying according even to the Labour Party's calculations.

I share the hopes of farmers that we shall resist any revaluation of the green pound. However, I do not go as far as some of my hon. Friends, who would have us reject an otherwise favourable settlement of the EEC budgetary problem if it involved even the smallest revaluation.

According to a reply given to me on 11 February, Wales has received no less than £833 million since 1973 from the Common Market, half of which has been in outright grants. There is no doubt that we shall be getting more help. It will come at a time when Government help for regions such as Wales is coming under heavier fire from areas such as the West Midlands. However, the regions would get more help if only the EEC had a more effective regional policy.

I wish that I could say that a British Government of whatever party had done more to bring about a more effective European regional policy. There has been plenty of support for one from the European Parliament, but the Treasury's bigoted determination to keep down the size of the total EEC budget, even if a larger total budget would be to the net advantage of the United Kingdom, coupled with the apparent determination of British Governments of either party to slap down the European Parliament the moment it shows any sign of doing anything effective—that is a sorry commentary on the hopes that were expressed that Britain's main contribution to the Community would be to strengthen its parliamentary institutions—have frustrated any attempt to get an effective European regional policy. Successive British Governments, including the present Govenment, have made a grave mistake.

I am well aware of the arguments against the Common Market. They are usually put forward extremely noisily by the hon. Member for Merthyr Tydfil (Mr. Rowlands) who, unusually, is not in his place.

Mr. Alec Jones

I should explain that my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) is in Committee dealing with the Oil and Gas (Enterprise) Bill.

Sir Anthony Meyer

I am most grateful to the right hon. Gentleman. I know that the hon. Gentleman would have been present if that had been possible. However, it is only fair that I meet the argument that I know he would put if he were in his place. The argument turns on the effect on Welsh jobs, especially at Hoover, of imports from the Common Market, especially goods such as washing machines.

There is a widely held misconception—it is more widely held than even I suspected—that the Common Market has produced a hideously adverse balance of trade. Our trade with the rest of the EEC is in surplus. It is true that if oil is removed from the balance—I cannot see why it should be—the balance of trade in manufactures is in the red.

The Common Market is by far our largest trading partner. When we consider the deficit as a proportion of the total trade, a different picture emerges. On that basis our deficit with the rest of the Community is one-third of what it is with the United States and one-twelth of what it is with Japan. That still leaves a problem for firms such as Hoover. It is true that Italian washing machines have been arriving here at prices that we cannot possibly match and of a quality that is equal to or better than that of our products. Is that the fault of the Common Market?

It is often alleged that the Italians are cheating. Of course, everybody knows that all the other member States are cheating except us. Try telling that to some of the poultry farmers. We are more likely to be able to stop cheating if we are in the Common Market and can take them to the court. If we leave the Common Market my understanding is that the Labour Party still wants to have industrial free trade with Europe. If they get it—which quite frankly is unlikely—how will we succeed in keeping Italian washing machines out? Maybe I have it wrong and the Labour Party wants to stop the world and get off. It may have no choice. It is hard to see any group of nations, or a single nation, wanting to enter into any binding commitment with us if we break all our solemn undertakings and pull out of the EEC.

Mr. Roy Hughes (Newport)

I feel that the hon. Gentleman is giving a wrong impression of the facts and figures of our trading position. We know that we are importing large quantities of manufactured goods from West Germany. Those imports are being paid for by precious North Sea oil which will put people out of work in manufacturing industries.

Sir Anthony Meyer

I believe that the hon. Member for Newport (Mr. Hughes) has a shaky grasp of how international trade works. We import goods from Germany and we export to them. We import goods from the United States and export to them. That all means jobs. If the balance is too adverse it is true that jobs are lost. The size of the trade matters most. Germany and the United States are pretty well on all fours in terms of the proportion of their deficits to total trade. Germany is the country in the EEC with which we have the largest deficit.

Maybe I have the Labour Party all wrong; maybe it do intend to try and step off the globe. In that case what will happen to inward investment? Every reputable economist who has looked at the matter sees that as the decisive argument for staying in Europe. I leave aside the overwhelming political arguments of peace and political stability. They have no peculiarly Welsh dimension. With Britain in the Common Market—that is the point my right hon. Friend the Secretary of State made—American, Japanese and, maybe one day, Arab investors will set up factories in Wales so that they can sell their products tariff-free throughout Europe, the world's largest single market. Why else do Mitel, Sony and National Panasonic come to Wales? Why should Nissan Datsun consider coming to the United Kingdom, perhaps to Wales, or better still to North Wales? Those hon. Members who hope to get those 2,000 jobs in or near their constituencies like the hon. Members for Flint, East (Mr. Jones) and Neath (Mr. Coleman) have become rather quiet lately on the urgency of leaving the EEC. I do not blame them. The Wales TUC seems to be developing a decent reticence at last.

I look forward keenly to questioning Mr. George Wright when he appears before the Select Committee because we all know that the only way to achieve investment and to provide those desperately needed new jobs, without imposing still further cuts in living standards which are already squeezed to the bone, is to persuade outside firms to manufacture in Wales. They will come only if they can use Wales as a base to sell the goods not just to 50 million British customers but to 300 million Europeans.

Compared with that we have Plaid Cymru's interesting suggestion that Welsh capital only should be allowed to invest in Wales. That is not much sillier than the Labour Party's present stance.

Mr. D. E. Thomas

Will the hon. Gentleman expand on that?

Sir Anthony Meyer

I do not have the advantage of a full account of all Plaid Cymru's deliberations. The reports I read in the press were that employment in Wales should be financed by Welsh capital.

Mr. D. E. Thomas

The hon. Gentleman should read more carefully.

Sir Anthony Meyer

Perhaps the hon. Gentleman will send me the full text. It may be even more revealing.

I have many misgivings about some aspects of the Government's policy and the presentation of those policies. I believe that the State has a bigger role to play in creating real jobs than most Ministers are prepared to admit. I am quite sure that the Government are going in the right direction and that they alone have the courage to stick to their course. I hope it brings to them and the Welsh people the success that such courage deserves.

6.15 pm

Mr. Tom Ellis (Wrexham)

The Secretary of State began his speech by warmly approving the setting up of the Select Committee and by implication rebuking the preoccupation of the official Opposition, when they were in Government, with what he called constitutional change. I want to talk about the Welsh economy and I feel that the key to the relative weakness of that economy lies in constitutional change.

I should like to remind the House of the answer given to me by the right hon. Gentleman a couple of months ago when I asked about the loss of male jobs in Wales over the past 20 years. 1 asked for the number of men employed at a suitably convenient date in each of the years 1960, 1965, 1970, 1975, 1980 and 1981. The answer was extraordinary. I will not trot out all the figures but almost as many male jobs were lost between 1960 and 1970 as between 1970 and 1981. Bearing in mind that the period 1960 to 1970 was one of world economic boom, that fact is remarkable and it influences my reception of some of the extravagant speeches that have been made on this side of the House by certain members of the official Opposition.

Secondly, I want to quote Mr. George Wright, the general secretary of the Wales TUC, speaking at the annual conference of the Wales TUC in 1976 when the devolution issue was beginning to develop. He said: We are seeking a Wales where we can have growth from within. We are not carrying a begging bowl into the next century That looks woefully over-optimistic in the light of the 100,000 male jobs lost in the past two decades. That loss has not suddenly happened with the advent of the present Government. I am not trying to defend them because I believe that their policies in many respects are wrong. We are dealing with something much more long-term and deeply seated than some right hon. and hon. Gentleman on this side seem to think.

Since the industrial revolution, Wales traditionally has been concerned with primary industries, mining, quarrying and agriculture and now oil refining. Welsh industry is predominantly in the primary sector and only in certain instances in the secondary sector. Certainly it is not in the tertiary and quaternary sectors of the economy. That is one of its great problems. At the end of the 1950s coal stocks were developing. In 1958 and 1959 there were stocks all over the country. Collieries were closing in 1960 and it is clear that the coal industry faced a bleak future. There was a loss of 100,000 jobs. During those two decades farming lost 35,000 jobs and steel lost 20,000. By 1965 one could see the dark clouds on the horizon for the steel industry. An enormous problem was beginning to develop during the world economic boom 16, 17 and 18 years ago.

The permanent secretary at the Welsh Office asked a member of the Welsh Economic Council in 1966—a professor of economics at University College of Wales in Aberystwyth, who was professionally involved in trying to estimate future employment prospects—whether he would undertake that task as part of his membership. Professor Edward Nevin agreed to do that and produced a highly technical economic report. He forecast in 1967 that by 1971—only four years ahead; he did not have a superlative crystal ball— there would be a loss by 1971 of 59,000 male jobs in Wales". That report was pigeon-holed and the White Paper for which it was intended—"Wales: The Way Ahead"—was published in 1967. One must remember that by this time unemployment was a key ingredient in Welsh affairs.

The White Paper rather blandly stated that the anticipated loss of male jobs would be 25,000. However, it stated that that figure would be reduced to 15,000 by the regional employment premium and that those unemployed people would be catered for by the jobs attracted into Wales by various grants as part of the so-called "regional policy". The response of central Government was regional policy and we now constantly hear that slogan.

The loss of jobs in 1975 was 57,000. Professor Nevin overestimated by something under 4 per cent. and was wrong by about 2,000. We are concerned with Welsh affairs and it is difficult to discuss the Welsh economy meaningfully or constructively on its own because it is so enmeshed within the British economy. My remarks have nothing to do with the absolute position of the Welsh economy. I am not talking about the misfortunes that have befallen this country, for whatever reason, but trying to consider Wales in relation to Britain as a whole.

I was struck by the Secretary of State's remark that Wales was now poised to make a relative improvement. I presume he meant that when the British economy stilts making an upturn, Wales, relative to the rest of the United Kingdom, will show an improvement. That is a pretty big claim and, of course, I naturally—and desperately—hope that he is correct. However, I wonder whether he appreciates the magnitude of his remarks.

The right hon. Gentleman referred to the factories that the Welsh Development Agency is building and said that he hoped to create 6,000 jobs, with another 6,000 in the pipeline. We are referring, of course, to long-term trends that have existed for 20 years. I might have referred to the mass emigration of the 1920s and 1930s; these are very long-term and deep-seated trends. I admired the skill of the Secretary of State and the right hon. Member for Rhondda (Mr. Jones), when they masterfully papered over the matter and presented a picture grossly at variance with the present realities. They hardly dealt with the real issues at stake.

Mr. Nicholas Edwards

I am interested in the hon. Gentleman's analysis, but the point that came through his remarks was that over 20 years or more—as I earlier said—the old primary industries were run down. We are moving into a new period and our relative position during the recession did not decline—we did slightly less badly than the rest of the United Kingdom during the downturn—because we have now moved into a period for which we prepared the infrastructure. We are attracting the new manufacturing industries and the whole base of our economy is altering and becoming far more diversified. We have some extremely attractive locations for growth in the new industries.

Mr. Ellis

I take the right hon. Gentleman's point. We have changed the base of the Welsh economy.

The White Paper of 1975 does not, unfortunately, deal with Wales but with Scotland, the North of England and Wales. It stated that in the decade between 1964 and 1974 these three regions lost between them 370,000 jobs and, at the same time, there was an increase of 378,000 jobs lost in the South-East and Midlands of England. The job losses from separate industries were detailed. Surprisingly, of those 370,000, about 120,000 were lost in coal mining, about 80,000 in manufacturing and the remainder in service industries. I hope that the Secretary of State is right I am not trying to make a party point but simply emphasising that he is being a little facile. There are much deeper issues at stake.

Mr. D. E. Thomas

Will the hon. Gentleman also take on board in his analysis the fact that de-skilling is occurring in the Welsh labour force; for example, in engineering? That industry's work force has substantially contracted and the sort of investment that the hon. Gentleman is so keen on attracting is mainly assembly line work for women. That is not because the multinationals wish to employ women but because they pay them lower wages.

Mr. Ellis

I take the hon. Gentleman's point. That is why I keep referring to male jobs.

Another example of what is happening in the long term—an aspect on which some hon. Members are concerned—are the school results in Wales and allegations that 0 and A—level results compare badly with those in England.

Various reasons are suggested for the poor results, but I fear that they have nothing to do with the education service. I am not an expert on education but, on the face of it, the Welsh educational provision is broadly similar to the English. It worries me that after two or three generations of emigration from Wales the native inherent stock is becoming a little suspect.

I know some people involved in sociological work who are concerned about education. That aspect, although there is inadequate evidence, may confirm the deep-seated trends. Many eminent authorities on economics, such as Gunnar Myrdahl, Hirschman, Perroux and the book written by the hon. Member for Vauxhall (Mr. Holland), point out that the concept of a few grants, tax allowances and employment premiums is cosmetic and will not tackle the problem. Paraphrasing Gunnar Myrdahl, he said that rich areas need poor areas alongside them for their sustenance. I am not an economist and am in no position to argue the merits of the economics but I am deeply concerned at his view.

When I was at school, my sixth form class contained 20 people and only two of them now live Wales. The rest had to leave. I am concerned that professional economists make such observations. After 50 years of regional policy, when the relative deprivation is no better than it was at the start, one must begin to question whether the Government's attempts are anything but cosmetic. One tells the Government of the day that their policies are not working, however much money they pump in—whether it is £50 million, £80 million or £100 million. The poor areas are not catching up with the rich areas and, when asked to slow down growth in the rich areas, the Government's answer is "Certainly not." The Government reply that the well-being of a poor area depends on the well-being of the whole country and that the well-being of the whole country depends upon the well-being of the rich area. The analysis that people such as myself increasingly make is that the problem for successive British Governments has been intractable.

I can give anecdotal evidence of economic policies and their results in Wales over the years. I am tired of giving what is a classic illustration not of the quantitative but of the qualitative issues involved in unemployment. I refer to highly skilled employment in scientific research. In 1972, Wales produced 5.1 per cent. of all the United Kingdom graduates in the physical and biological sciences, roughly proportional to the Welsh population of the United Kingdom. Half these people are employed in jobs that are not tied to localities. They can go anywhere. One of the attractions of science is the chance to carry out research. I am referring not to postgraduate research in universities but to full-time professional careers in research.

The Government have 99 research establishments employing 13,850 graduates. Not one is located in Wales. There are 38 industrial research associations. Not one is located in Wales. There are 26 nationalised industry research associations. Not one is located in Wales. This issue goes much deeper than economic. The whole question of constitutional change is involved. I recall the debate on devolution. I would remind the hon. and learned Member for Denbigh (Mr. Morgan) that there was no question of Wales being separated from the United Kingdom. When, during those debates, an hon Member argued strongly against the establishment of a Welsh Assembly, I intervened to say that the hon. Gentleman's case was that an Assembly would somehow constrain Wales in its approaches to Whitehall for charity. The basic argument was that the establishment of a Welsh Assembly would mean that Wales could no longer expect this or that grant.

We are therefore in deep water. We are not talking about some little technicality of economics. This is a profound issue. Few regional policies in the world have succeeded. The only success in Europe has been West Berlin. It is on the periphery. With the exception of its age structure, West Berlin has compared favourably for a long time with the rest of West Germany. The only unfavourable comparison is the age of its population. People, at the age of 65, are, allowed through the Berlin wall.

The first essential is political clout. West Berlin has prospered because, for political reasons, it had to prosper.

Mr. Nicholas Edwards

The hon. Gentleman has written off regional policy pretty comprehensively. I am left wondering what are the proposals of the SDP-Liberal alliance to deal with the industrial and economic problems of Wales.

Mr. Ellis

The right hon. Gentleman has misunderstood what I am saying. I have not written off regional policy. It has done some good work. It is, however, toying with a deep problem. We shall, in the first instance, shift the perspective from economics to politics. The issue is one of politics. The proposal for a Welsh Assembly was defeated ultimately in the House because some hon. Members who live in the North-East-1 am not criticising them—saw the threat to the North-East of the power of a Scottish Assembly. This is tacitly to accept the case that, given the political clout, we might begin to achieve something.

When we come to power—that time is not far away—we shall not concentrate simply on the "cosmetics" of this or that grant or the building of this or that road. One talks of roads. For nearly a century, the Rhondda valley was the Abu Dhabi of the time, spewing out wealth for the world. Today, the Rhondda valley is approached by a cart track, compared to the wealth it has produced. These are the issues that we shall tackle when we come to power.

6.35 pm

Mr. Ian Grist (Cardiff, North)

The House always enjoys the thoughtful discourses of the hon. Member for Wrexham (Mr. Ellis), who is rather a rogue elephant. I wonder sometimes not only whether his colleagues are unaware of what he intends to say but whether he himself knows, when he begins speaking, where his thinking will lead him. His speech reminds hon. Members, however, that we are approaching the anniversary of the referendum on devolution for Wales. The proposal was defeated convincingly, not by Labour Members representing the North-East of England. but by the people of Wales themselves. The only party that showed that it understood the innermost feelings and loyalties of the peoples of Wales was the party that my right hon. and hon. Friends and I represent.

My right hon. Friend the Secretary of State asked hon. Members to speak up for Wales and to proclaim its benefits, its beauties, its virtues, its opportunities and its advantages. That we should never cease to do. The simple fact is that Wales has all those attractions in abundance. Far from Wales being located on the periphery, it is worth remembering that the corridor of the M4 linking South-East England and South Wales brings the high technology companies that we seek. Those companies, I remind the hon. Member for Newport (Mr. Hughes), have settled in some density in and around his constituency. They would never have done so if Britain had not been a member of the EEC. The damage to employment in the steelworks in his constituency would have occurred whether Britain was inside or outside the EEC. The same applies to East Moors in Cardiff and to Ebbw Vale up the valleys from his constituency.

The attraction of the Chemical Bank to Wales was a fine example of the advantages that we can offer. I should like, in passing, to thank my right hon. Friend for the urban aid that he has granted to the Cardiff university industry group. That sort of group, combining with industry and business around the university campuses, has proved valuable in the United States and in Europe. There is clearly scope for its development in this country. A case can perhaps be made for rearranging our tax affairs to give academics a greater stake in the businesses that they may be able to help to establish or build up.

All hon. Members are waiting for the Budget. This debate is sandwiched between the debate instigated by the hon. Member for Ogmore (Mr. Powell) and the Budget itself. I look for a neutral Budget. If any boost is to be given over and above the indexing of tax rates, I hope to see housing benefit. This is perhaps the quickest and most effective boost that could be given.

In the last few days interest rates have begun to edge down. If that trend continues it will give a greater boost to industry than almost anything that the Chancellor of the Exchequer can do. It would also be anti-inflationary. The same cannot be argued for most of the alternative boosts to the economy urged upon the Government. If interest rates go down, perhaps in unison with those of our EEC partners, it is possible that the pound will continue to drift slowly further down as it has done in the course of the last year. If we can then keep our incomes down, the international competitiveness of our economy will be formidable. That is where the profits, investment and jobs will come from.

Hon. Members will remember that in the autumn of 1978 the then Prime Minister, the right hon. Members for Cardiff, South-East (Mr.Callaghan), warned that incomes had to be kept to an increase of no more than 5 per cent. and that if they rose more than that unemployment would rise sharply. Yet incomes rose by 15 per cent, and we were on the roller-coaster, already suffering from massively rising unemployment when we hit the world recession coming in the other way. That is why we are where we are now—that, combined with the inefficiency and the lack of competitiveness that we built up over many years, meant that we were in no position, unfortunately, to save the jobs that we all wanted.

The hon. Member for Gower (Dr. Davies) put forward the obvious argument—which we heard in the 1960s—that Wales depended on public sector jobs and that we needed to get more of them because that was the way to safeguard jobs. It is the curse of our national economy that we hive so many public sector jobs and the private sector has taken the brunt of the rundown. That is where the jobs have been lost and the pay restrained. The public sector has barely been cut back compared with the private sector, and yet it has the protected pensions and the pay rises.

For instance, in the coal industry this year there have been rises of around 10 per cent. in a loss-making industry. There are not many loss-making private industries that could give a pay rise of 10 per cent. this year and a promised pension on the basis that the National Coal Board can. Nevertheless, private industry buys its coal or its electricity which is 70 or 80 per cent. made by coal and it will have to find the money to pay for those wages rises. Private industry may have to shed jobs so that miners and others can keep their jobs. That is the truth of the matter.

Mr. D. E. Thomas

Would the hon. Gentleman care to nominate which particular jobs in the public sector in Wales he wants to chop?

Mr. Grist

I was primarily talking about restraining pay demands. If that is done:, the demands on jobs will not be the same. If it is not, and if our economy continues on the downward path, there will be nothing sacred about schoolteachers, miners, steel workers, health workers, nurses or hospitals, because if the country does not make the money we cannot pay for any of them. That is the plain truth.

We are being urged in certain directions by Labour Members. The hon. Member for Gower said that we needed to spend £5,000 million. The right hon. Member for Stepney and Poplar (Mr. Shore) wants us to spend £6,000 million and when pressed to say where he would find the money he said that he would borrow it, which is what the right hon. Member for Rhonda (Mr. Jones) suggested. This weekend the right hon. Member for Ebbw Vale (Mr. Foot) said that he wants us to spend £8,000 million in the first year. That is not the highest figure—the TUC wants £12,000 million. Where is all this money to come from?

The right hon. Member for Ebbw Vale said at a public rally at the weekend that the Labour Party, if elected, would engage in a massive increase in public spending. It would use interest rates, exchange controls and exchange reserves—I should think that it would—to bring the pound back to a competitive level. What that means is that controls would be slammed on to stop a runaway slide in the pound, which would hoick up the inflation rate to catastrophic levels.

The right hon. Member went on to say that the Labour Party would use price controls, subsidies and indirect tax reduction to restrain inflation. Yet those things do not restrain inflation, because subsidies have to be paid for, indirect tax reductions have to be paid for and price controls reduce the capacity of firms to invest, so that has to be paid for. It is all done on more and more borrowing.

What the right hon. Gentleman did not say—perhaps the hon. Member for Newport will be disappointed—was that we would have import restrictions but I have heard his hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) say that the Labour Party would bring in import controls. He certainly said that when he was with me on a television programme a fortnight ago. He said that the Labour Party would slam on import controls and thereby exit from the Common Market. We would have import controls, with presumably no action being taken against us by the markets to which we export, Germany being our biggest at the moment.

The right hon. Member for Ebbw Vale realised that some people might put in for wage increases of a damaging level, but as nobody these days is allowed to talk about income policy he had a further plan for a "national economic assessment", a relation of "solemn and binding", presumably, between the Government and the trade unions. This, he claimed, would ensure that workers could achieve better and more secure advances in living standards without exposing our plan for full employment to the hazards that might threaten it if inflation began to accelerate. He noticed that it just might. There would be an undertaking between the Labour Government and the unions to restrain demands for higher incomes.

Does anybody believe that? Is that not precisely the programme that we went through with the last Labour Government? Have Labour hon. Members not learnt from their last period in office? Is that not what strained relations between the Left and Right wings of the party with the Right wing understanding common sense, being able to add up and understand economic policies, and the Left wing refusing to do so? Is that not precisely what the right hon. Member for Heywood and Royton (Mr. Barnett) mentioned in his recent book—the educative process that the Labour Party had to go through, with a Treasury Minister standing at the Dispatch Box and will again have to answer his Back Benchers and explain to them that two and two make four and that if there were overspending one would have to go to the bankers and the IMF and cut back expenditure more savagely than this Government have ever done.

The right hon. Member for Rhondda found himself in the ping-pong argument about who built roads for Wales. Both sides have been in and out of Government fast enough now for all of us to announce roads, start roads and open roads which the other party had announced when in Government. However, when we went to the IMF road building slowed up. This Government have a record road programme. We are opening roads which perhaps could and should have been opened by the Labour Government. That is what happens when a Government spend madly.

We all have a worry over the standards of education. It has been referred to before. The Welsh Select Committee has examined the question briefly and perhaps will look at it again. We ought to expect more from our education than we get at the moment. We are spending more per pupil, we have the best pupil-teacher ratio that we have ever had, we have increased the school leaving age—perhaps a good thing, perhaps not—we have more people staying on after the official school leaving age, more children are taking exams and more people passing exams. That is fine.

On that basis—and this is a national problem—our children ought to be doing better than they are doing. Within our ambit, why is it that in Wales the figures are even worse than they are nationally. Even at A-levels, the top end of schooling, we are slipping. Until now, in Wales, the bright boy or girl—particularly the bright boy—received a fine education. Those pupils were given every encouragement to get on. The not so bright were destined for the land, the steelworks, or the pits and did not have to be too clever. Now there are people turning up at the mines whom the mines do not want because they cannot read the safety notices.

Wales used to have a fine record in its grammar schools, but apparently now our achievement of the top A-levels is slipping below the English level. Cockroft and other reports show that our numeracy, our capacity in maths, seems to be below the national average, for no clear reason. There is no basis in genetics or anything else that I know why pupils in Wales should not be good at mathematics. I know that my hon. Friend who is to wind up the debate has taken a close interest in this subject, and I hope that he will be able to do something about it.

The hon. Member for Wrexham told us about the 20 people in the sixth form, only two of whom now work in Wales. I wonder what the other 18 do. It would seem that if someone is good at speaking, he will go into politics, the trade unions, acting, the law, teaching, preaching, or anything that we in this House do. That is what Welshmen are famous for, but they are not so good at founding industries or famous for using their hands. The one person who was good at that was a Mr. Matthews, but he had to go to Canada to make his fortune. We are pleased that he is coming back and bringing jobs back to Wales. He is the man who founded Mitel. It is surely a pity that we cannot do more for him and his like in their younger days in Wales.

Mr. Alec Jones

If what the hon. Gentleman is saying is correct, and if there is a deterioration in education standards, is it not all the more remarkable that more and more school teachers are joining the dole queue and that there are fewer and fewer places in our universities? Is there not a contradiction in what the hon. Gentleman sees as lacking and the way in which the Government propose to tackle the problem?

Mr. Grist

I said earlier that there are more teachers per pupil now than there have ever been, so the trouble is not a shortage of teachers. Perhaps it is what teachers teach, what parents and relatives put over, what motivates youngsters, and what aspirations they have. Perhaps in the past aspirations in Wales have not been great. There has been a greater readiness to believe that a low level of achievement in life was all that one could expect. Is it not time to get over to the youngsters of today, at a time of high technology, that the world is their oyster? We should try to get that message over.

If we do that, we shall not have debates, particularly Welsh debates, when we moan about what is happening in Wales. We have every right to be the same as the rest of the United Kingdom, at the very least. If we use our common sense and instil into our youngsters an ambition to succeed and a lack of readiness to accept second best, perhaps the disappointing examination results will be overcome and in 20 or 30 years our heirs in this place will say "That was the black period, but now we are out of it. We have modern industry and high education. We are at the peak of the United Kingdom in a high-achieving European Community".

6.53 pm

Mr. Leo Abse (Pontypool)

I am sorely tempted to follow many of the speeches that have been made today. Certainly I was sorely tempted to follow the speech of the hon. Member for Flint, West (Sir A. Meyer), who gave the Secretary of State for Wales an instruction kit about how to present Conservatism with a human face. I should have liked to add to that contribution, had time permitted.

I am tempted also to follow what was said by both the hon. Member for Flint, West and the hon. and learned Member for Denbigh (Mr. Morgan), when they mocked the actions of county councils in Wales in declaring Wales a nuclear-free area. I sometimes wonder whether they appreciate how deeply rooted is the tradition of pacifism in the Principality from Henry Richards, to Keir Hardie, to today. If any lesson is to be learnt from such a unanimous expression of opinion by people who normally engage in the daily tasks of local government, it is that, at a time when billions of pounds are needed to put the British economy on its feet, it is absurd to contemplate spending billions of pounds on Trident.

Wales spoke clearly to the Government, and it is unwise of Conservative Back Benchers to close the Secretary of State's ears to a genuine repulsion on the part of the people of Wales who want to make sure that the next generation is not the last generation. I am unimpressed by people who mock the reaction of our county councils, and at the same time identify Soviet aggression, while remaining silent about the terrible events taking place in Central America as a result of the follies of Reagan. If the Government and their Welsh Back Benchers believe that they are assisting this country by tying themselves to the American chariot, I am thankful that we are hearing the saner voices of more humble men in the more humble assemblies in the Welsh county councils.—[Interruption]. I am beginning to be tempted, but I resist that temptation. Instead, I shall take up the theme introduced by the hon. and learned Member for Denbigh, who expressed the opinion held by many people in Wales that if the Welsh fourth channel fails, it will mean the ultimate destruction of the Welsh language. That is his view, and I respect it. I do not know whether he is right or wrong, but I know that a valiant effort has been made to arrest the decline of the language by the funding of the Welsh fourth channel.

The Secretary of State, in his opening remarks, referred to the work of the Select Committee on broadcasting in the Welsh language. He described the Select Committee's report as a thorough and perceptive appraisal of Welsh language broadcasting. He said that the report contained comments and suggestions of immediate relevance to the establishment of the Welsh fourth channel. I doubt whether those of us who sat on the Select Committee appreciated how immediate and relevant in some respects its recommendations were. A failure to follow three of its recommendations—although many were accepted—has already caused a shadow to fall on our hopes that Wales would gain high-quality, apolitical, Welsh language programmes capable of gaining substantial audiences.

I shall remind the House of the three recommendations that were not implemented. Then I shall attempt to tabulate some of the immediate consequences following their non-implementation. First, it will be recalled that the Committee, while welcoming the opportunity to increase the diversity of sources of Welsh language television programmes, and using the independent sector, clearly insisted that the Welsh fourth channel should recognise both the greater financial obligations of Harlech Television and the quality of the programmes offered. The Committee knew that the bulk of Welsh language programmes would compete with no fewer than three English language channels in the peak viewing programmes. Quality is all. If it is not attained, the expectations of those who claim and hope that the Welsh fourth channel will save the language will be utterly dashed.

Secondly, the Select Committee, understanding the tens of millions of pounds that would be within the patronage of the Welsh fourth channel authority, believed it essential that an advisory committee should be formed whose responsibility would be related to the totality of. the channel's output—that coming from HTV, from the BBC and from independent producers. The Select Committee gave pungent reasons why that advisory body should consist of both Welsh and non-Welsh speakers. We did not accept that the necessary invigilation could possibly be done by existing bodies whose formal competence would extend clearly to only part of the output, not only leading inevitably to a fragmentation in approach but leaving the untried and untested independent producers totally free from any invigilation whatsoever.

Sir Goronwy Daniel, with his customary eloquence, sought to persuade us. He said: We do not want to set up a large empire of our own which is going to be duplicated in the work of other people. Happily, the Committee was not seduced. It asked "What other people?" There are no other people so far as the independent producers are concerned. The existing advisory committees of the IBA and the BBC have not even the most tenuous connection with them.

Like Sir Goronwy, the Select Committee also did not want to set up empires; but nor did it wish to set up emperors who would be free from constraints and would have unlimited powers of patronage as great as those o f the Medicis or the Borgias. Indeed, I would hesitate to cast Sir Goronwy Daniel in the unlikely role of Lorenzo the Magnificent or Mr. Owen Edwards as a Cesare Borgia. However, as the Select Committee affirmed, the court of Sophia Close is dangerously incestuous. In fact. that was the language that we used in our report.

That is why in the third and final recommendation we called for the reconstituting of the Welsh fourth channel authority. That was rejected by the Secretary of State. He said: My opinion was reinforced by the Welsh fourth channel claim that remarkable progress those are their words— had been made and there were very clear advantages in terms of decision and implementation. That claim looks pretty sick today. On the eve of the launching of the fourth channel, after months of negotiation, no contract has been signed between HTV, the intended main supplier of programmes to the Welsh fourth channel, and the authority. The air is thick, not with detailed announcements of the programmes that Wales can be expected to enjoy, but with bitter and severe recriminations. Mr. Owen Edwards told the Western Mail on Monday that there was no absence of goodwill and no friction between the two sides. HTV's managing director refused to comment until negotiations are complete. Unhappily, Mr. Ron Wordley's silence on this occasion is more eloquent than Mr. Owen Edwards' over-determined affirmation.

Everyone in the media in Wales knows that, lamentably, there is heavy trouble. Public life, which includes media life, is lived in a glasshouse in Wales. There are no kept secrets in Welsh public life. We are, praise be, the most open society in Europe.

The substance of the argument, although not the only one, is that although HTV, as it made clear to the Select Committee, is ready to keep to its commitment to supply extra hours of Welsh language programmes, and to make clear its readiness to build up to making those programmes so that they are enriched,and enhanced to the standards which the Welsh authority rightly demands the Welsh authority appears to have embarked on a deliberate course of activating and encouraging independent producers who are now intended to supply not the two hours a week, as all members of the Select Committee will recall was canvassed before us, but at least double that amount.

The belief was so widespread that the Welsh authority was more than ready to offer a helping hand to eager independent producers, in England as well as in Wales, that now at least a dozen independent producers are on the predatory trail. Understandably, competent and important Welsh-speaking staff looking for more—I understand the temptations—are flowing from HTV and BBC Wales. Twenty-four have recently left HTV and 18 have recently quit the BBC. On the sidelines stands the Welsh Development Agency, which is clearly ready to give help to the media entrepreneurs who so happily find Wales awash with public money.

Every day seems to bring me further news of puzzling handouts. Understandably, Welsh-speaking actors are joining in the bonanza, because inexplicably those who work for independent producers are to be paid £320 a week out of Welsh fourth channel funds, which is more than twice as much as the agreed regional rate paid by HTV and other regional companies to actors and artistes.

Mr. D. E. Thomas

They are being paid the Equity rate.

Mr. Abse

It is the agreed rate sanctioned by the Welsh authority. I am not surprised that the hon. Member for Merioneth (Mr. Thomas) immediately wishes to take up the cudgels on behalf of the independent television companies——

Mr. Thomas

I assure the hon. Gentleman that I am not taking up the cudgels of those within any independent television company. I simply say that any colleagues of mine or any other hon. Member who are in the acting profession, which suffers from high unemployment, have a right to expect the Equity rate when they find work.

Mr. Abse

Even if one considers the Equity rates applying to network programmes, £320 a week is far too high and the hon. Gentleman should know it.

I suspect that some of the hon. Gentleman's hopes are my fears and the fears of many who sat on the Select Committee. Why has this unexpected configuration come into existence? It is a picture of the programming of the Welsh channel that was certainly not presented to the Select Committee and was not anticipated when the Select Committee insisted on the need for sufficient funds to be given to the Welsh fourth channel authority to ensure that the three-year experiment had a fair run. If it is because the Welsh authority found that HTV was asking for too much money, why has it spurned our Committee's recommendation that it should check HTV's costs by giving ITV contractors other than HTV an opportunity to quote for Welsh language programmes? To the credit of the IBA, in response to our report it said that it would be glad to assist. How convincing is the suggestion that HTV is the real cause of the difficulties when the fact is that if HTV profited unduly, the IBA would undoubtedly intervene to lift HTV's fourth channel subscriptions disproportionately at the first annual review?

We had before us the tough men of the representative body of the other independent television companies, who wished to subvent the Welsh programme by £10 million. I do not have the slightest doubt that the purpose to which the £24 million total is to be put will be minutely and critically dissected. Those tough men would not let HTV get away with their money, and no one would blame them for that.

What is the game? Why has the Welsh fourth channel embarked upon a policy that would lead to it paying out to independent producers not what was originally contemplated, but at least £3 million more for programmes, bringing the total amount to £8 million? That was never presented to the Select Committee. Although I do not doubt that some of the independent productions will be innovatory and of quality, all of us know that outside broadcasting needs processing, editing and sophisticating. The underestimation of post-production work leads to the dangers of poor quality work, which could lead to trouble for the fourth channel. There are also other dangers.

The hon. Member for Brecon and Radnor (Mr. Hooson) put a clear question to Mr. Alwyn Roberts, which caused the BBC national governor for Wales to reply:

Let me say that I accept entirely your statement that where language and culture become political matters there is a tendency to identify the user of a language with the political viewpoint associated with it … Is there a connection between language, culture and politics? The answer must clearly and unequivocably be 'Yes'. When there are such dangers and when we spent so much time to make certain that the problems of balance were clearly understood, if we are now to permit independent companies to spawn and be financed, it is serious that those companies should be allowed to go on their way with no invigilating and advisory body in which we can feel confident. New efforts are being made by the Welsh authority to make certain that the programmes that are being presented are completely free, as they should be, of political bias.

Mr. Nicholas Edwards

Having listened to the hon. Gentleman's contribution, I think that he is being less than fair to the authority, which has a formidable task in bringing the new service into operation. He appears to ascribe to it motives for which there is no evidence. I have recently discussed these matters with the IBA, the authority and the representatives of HTV. It is not in the least surprising that there are tough negotiations. One of the problems is that HTV cannot for two years provide the resources needed by the new channel. Therefore, the new channel is bound to make use of independent producers. It should not be a matter of worry and anxiety that we shall have sources of programming on our television service other than HTV. I cannot imagine why the hon. Gentleman thinks that only HTV can provide the service needed by the Welsh people.

Mr. Abse

On the contrary, we urged the Welsh authority to check on the costs of HTV by offering programmes to other independent television companies. Every reason was given against taking up the offer in their response, although the IBA made it clear that it was prepared to help and co-operate.

The real risks are coming about because the time for independent television companies will be doubled. Those companies are being formed with amazing rapidity. They are not being funded on the basis of only a few years in operation by the WDA. It is not intended that they should be set up for only a short time.

The Secretary of State understandably may have been lulled into the belief that, in view of the apparent speed with which the authority was operating at the beginning, there was no need to set up advisory committees or to reconstitute the authority. I understand the Secretary of State being lulled by that. Perhaps the Select Committee does not have completely the right answer on how the new development will be invigilated. Unless it is invigilated, I have no doubt that throughout Wales there will be a feeling that a gravy train exists, that people are getting on it and that it is travelling towards an absence of control over political bias.

Mr. Nicholas Edwards

The hon. Gentleman has launched what can only be regarded as an attack on the authority. I have personally investigated the situation recently. It is right that one of the reasons for the delay in reaching the settlement is that the chairman, who was rightly conscious of the fact that the contracts would be closely examined by Select Committees in the House of Commons, is taking a great deal of trouble to see that the cost of the contract offered by HTV is reasonable. It is not a matter for complaint that he should be negotiating toughly with potential contractors. The House should praise him. I do not attach such a sense of fear and anxiety to the possibility of independent producers being used. They may have independent talents and may provide jobs in many parts of Wales, where they will be greatly welcomed.

Mr. Abse

The Secretary of State's response will be noted. I have no doubt that the television companies will be able to make their own responses to what he has said. Instead of the atmosphere in which the fourth channel will be launched on 1 March being one in which everyone will be committed to trying to save the language and working together, the main supplier and the Welsh authority will be at arm's length because they have been unable to re ach a conclusion. I hope that they will reach a conclusion, but I also hope that a brake is applied to ensure that there is not an impression abroad that millions of pounds will go into the hands of entrepreneurs who are politically uncontrolled or insufficiently invigilated.

All of us have one goal. which is to ensure that, if the language can be saved, everything must be done to help the fourth channel. I am unimpressed by the fact that at this stage of the game no negotiations have been concluded. The Secretary of State for Wales may in the long run regret his impetuous intervention as more complaints and more concern arise about the money washing about and people take advantage of the new state of affairs.

7.17 pm

Mr. Tom Hooson (Brecon and Radnor)

I do not intend to follow the hon. Member for Pontypool (Mr. Abse) in pursuing that last subject studied by the Select Committee on Welsh Affairs.

I shall make a brief comment on the Welsh water authority, because of the news that the Secretary of State gave us today. The news that we have heard over the past month about the losses of the Welsh water authority and the projected increases in water charges for the coming year have underlined the wisdom of the Secretary of State in tackling the problem of the management of the authority. It is remarkable to think back to the opposition by the official Opposition to steps to tackle the problems of the Welsh water authority. I know that there will be good will from both sides of the House towards the new chairman, Mr. John Jones. We shall look for a considerable injection of his management skill into the Welsh water authority.

At the end of a distinguished career in public service we owe to Mr. Haydn Rees, the present chairman of the Welsh water authority, the advice that we should be moving towards a much smaller board structure. He has done a great deal to identify the management needs for the future. It is important that this distinguished public servant of Wales, who had a long record in local government in Clwyd before moving to the Welsh water authority, should receive a tribute from the House.

It is appropriate that most of the debate has dealt with the economy and industry. I, too, shall make a few comments in that direction. There is no question but that unemployment has been the biggest problem facing Wales for many years. We are coping with the worst world recession since the 1930s. I regret that on the whole there is a sterile response from the official Opposition. When they are asked what they would do which would be different from the policies that increased unemployment in Wales from 38,000 to 83,000 under the Labour Government, we hear a long recitation of sterile suggestions, all concentrating on a policy of inflation. My hon. Friend the Member for Cardiff, North (Mr. Grist) made that clear. Nothing is more certain to increase unemployment than policies of inflation.

In addition to the short-sighted emotion which is the substitute for economic thought on the Opposition Benches, there is the policy of pulling out of the Common Market. That, too, may be expected to reduce employment prospects in Wales, which relies so much on inward investment for jobs.

Any creation of new employment is bound to be a slow process. I endorse many of the points made by the hon. Member for Wrexham (Mr. Ellis) in that context. He is right to point to the relatively modest number of jobs which can be produced in a short time from developments such as advance factories. It is a remarkable achievement that 43 of the new factory buildings are concentrated in Wales. That is a firm recognition of the size of the Welsh problem. My right hon. Friend the Secretary of State deserves credit for the support that he has given to the Welsh agencies. The 1.2 million sq ft of Welsh Development Agency factory space let over nine months is an impressive achievement. The 14,000 jobs that have been created in five years are to be welcomed. I am completely ungrudging in recognising that this scheme was started by the Labour Government. I do not believe in the ping-pong game of who takes credit for initiating each scheme.

In Mid-Wales, 5,000 jobs have been created over three years by the Development Board for Rural Wales. That body has certainly justified its existence. A great deal depends on a mature response from trade union leaders to ensure that people do not price themselves out of jobs. I refer to the largest factory rented from the Development Board for Rural Wales—the Smiths factory in Ystradgynlais. The need for jobs there is great and Smiths will create an influx of jobs in the coming year.

How far those jobs will prove to be permanent depends largely on cordial relations and an improvement in productivity, because the type of motor accessory produced at Ystradgynlais depends on the most vigorous pricing and marketing policy and on being competitive. Therefore, we depend very much on the maturity of trade union leaders and workers to recognise that it is possible to lose jobs much more quickly than it is to create them.

Another important element in attracting jobs to Wales is to make sure that we take full advantage of the funds obtainable from the European Community. About £800 million has already come from various forms of European aid, and that is very welcome. It is appropriate that the next subject for intensive study by the Select Committee on Welsh Affairs should be that of Wales' relationship to the European Community. Members of the Select Committee, other hon. Members and many people in Wales have much to learn about the workings of the Community.

Goodness knows, it has been a frustrating operation in which to take part and my faith has frequently waivered. That is as far as I can go to comfort the hon. Member for Newport (Mr. Hughes). Despite all the frustrations of the Community, the horrors of being out of it would be far more serious. Opposition Members should bear in mind the careful assessment by Ivor Richard, a former colleague of theirs, that there would be a loss of 50,000 jobs in Wales if the Labour Party succeeded in pulling Britain out of the European Community.

When making statements about the danger of job losses, it is important to identify where those losses may occur. The Western Mail of 25 January reported a survey conducted among 508 American electronics companies.

That is precisely the category of manufacturing to which Wales looks for jobs. There is a great need to find jobs which occupy the brain, as they are the jobs of the future.

The survey, which was reported in the "Electronics Location File", included the following question and highly significant replies: If Britain left the Common Market (EEC), how would it, in your opinion, affect her suitability as a European base for an American electronics company?

No longer suitable	27.2 percent. (138 companies)
Less suitable	33.9 percent. (172 companies)
Remain the same	24.6 percent. (125 companies)
More suitable	4.1 per cent.(21 companies)"

Those figures are clear evidence of how those American businesses view the prospect of Britain leaving the Common Market.

When the same companies were asked for their preferred location now, the United Kingdom was first, followed by Germany and the Republic of Ireland. When asked for their preferences if Britain were no longer in the Common Market, Britain slipped to third. That is a specific example showing why we have every reason to be keen to stay in the EEC.

The improvement of communications in Wales has received only light treatment today. An inadequate communications system has long been one of the great drawbacks for Wales. Yet that ought to be an area in which Wales has a considerable advantage over, for example, the North of England or Scotland, as it is closer to the greater population areas. Considerable progress has been made in communications during the past 20 years. It was a Conservative Government who started the M4, but again I shall not indulge in the ping-pong game of who takes the credit for these projects.

It is impressive that the real expenditure on the roads programme in Wales is now higher than it has ever been. I give my wholehearted support to the Government's sense of priorities. In laying stress on the development of the road structure, especially in aiding smaller road programmes, they are emphasising the roads that lead to the factories. It is useless providing modern plush factories if access to them is via a bumpy road. Success depends on good roads as well as space for work.

In that context, I am sorry that in Mid-Wales one can hardly speak of any rail service at all. Moreover, in the review that British Rail will have to make in the aftermath of the recent irresponsible labour troubles, I am highly apprehensive about the future of the small Mid-Wales and Cambrian lines. I hope that my fears are unfounded, but those lines are highly marginal by any criteria. They have been supported by successive Governments in recognition of a certain contribution to the fabric of rural society. Nevertheless, at a time of great difficulty for British Rail, they are bound to receive very hard scrutiny. Although that is a worrying aspect of communications, 90 per cent. of communications in Wales depend upon the road network.

I wish briefly to follow my hon. and learned Friend the Member for Denbigh (Mr. Morgan) in his comments on agriculture, which is the chief industry in large areas of Wales. The news has been gradually improving. The annual review shows a 14 per cent. increase in farm incomes, but this only brings farmers back to where they were five or six years ago. They have faced very difficult years since the mid-1970s, as is shown by the fact that borrowing by farmers is now three times the 1975 level. The trend is good, but there is still much to be achieved.

The Government deserve credit for the successful negotiation of the sheep regime, which has contributed substantially to the improvement in Welsh farm incomes. The Farmers Weekly of 5 February stated: Improved returns from sheep boosted incomes on many Welsh farms during 1980–81, according to the latest farm management survey by Aberystwyth University. On livestock rearing farms using better quality land, the average net farm income on a sample of 72 holdings was up from £3756 to £5120… On poorer land livestock rearing farms, the improvement was even more dramatic. The average net farm income was up from £3228 to £7840 and this represented an increase from £26 an effective hectare to £71 a hectare. That is very encouraging, but it leaves a considerable problem of imbalance on the hill farms of Wales. For a number of years there has been a steady decline in the size of the beef herds. A sensible agricultural policy requires rather more profitability on the beef side. One cannot look entirely to sheep. Both must contribute to the strength of the farm economy. There are good signs of progress in this direction, but the news is less good for cereals. In arable farming, which is dominant in much of England, the improvement in income last year was 13 per cent., whereas in livestock, which is the basic Welsh category, the improvement was a more modest 6 per cent.

I hope that the Minister will hold out some hope today about the review of marginal agricultural land, a subject which has been moving slowly. It was brought to life at the very end of the Labour Government, who had slept on it for several years. It has implications for access to Community funds, so if we are to derive maximum benefit from the Community we must work out how the category of disadvantaged agricultural land can be extended.

Reference has been made to the need to maintain the present level of the green pound. Another factor is the great importance of maintaining fair play in what is supposed to be a common market. That means taking vigorous action to prevent discriminatory payments by the French Government aimed only at supporting French farmers. This is of great importance in maintaining a sense of fairness among farmers throughout the Community.

I wish to refer to one or two concerns in Mid-Wales. We have been promised a review of the status of Mid-Wales as an assisted area. The review must take place very shortly, because we shall lose intermediate status at the end of July. I must tell the Secretary of State that there is grave concern in Mid-Wales about our ability to attract industrial investment if allowances are not available for expenditure on plant and machinery and on buildings. There is also great anxiety that if we do not have assisted area status we shall also fail to qualify for European Community funds. That aspect, too, must be considered.

I look forward to a very early review, and I should welcome any information that the Minister can give today on when the formal procedures will begin. I am already talking to the Development Board for Rural Wales and to my own county council, Powys, about this, and I know that other councils will be anxious to make representations.

Finally, I must express disappointment in the Government's performance so far in the handling of the rate support grant now that it is in the hands of Welsh Office Ministers. If anything is disciminatory against the finances of rural counties, it is the thoroughly inadequate allowance for the sparsity factor in population. Many costs are undoubtedly greater in counties with small populations than in the densely populated areas. No county has a more acute interest in this than Powys, where the population density is only 0.2 persons per hectare. Even in the other rural counties of Dyfed and. Gwynedd, the figure is closer to 0.6. Therefore, although this is a matter of concern for all rural counties in Wales, concern in Powys is especially acute. I am disappointed and aggrieved that no effort has yet been made to improve the allowance for the sparsity factor, and we in Powys shall be very discontented if the Welsh Office continues to be as complacent about this as it seems to have been so far.

7.38 pm

Mr. D. E. Thomas (Merioneth)

I shall not be tempted to go into all the subjects that have been raised. 1 am sure that I shall have the opportunity elsewhere to reply to the cold war rhetoric of the hon. and learned Member for Denbigh (Mr. Morgan). Nor shall I be drawn 'alto responding to the baseless allegations, motivated entirely by headline seeking, made by the hon. Member for Pontypool (Mr. Abse). The media are always interested in themselves, so speeches about the media are always well reported. I am sure that the hon. Member had arranged the whole episode. I am also sure that the fourth channel authority is well able to respond for itself and will do so when it launches its new programme properly next Monday.

I shall not speak tonight on the Welsh economy or on the social consequences of unemployment that I outlined when I spoke in a debate initiated by the hon. Member for Ogmore (Mr. Powell). What was then said about the social consequences of unemployment has since been demonstrated even more clearly. The Welsh Office cannot respond by a change of policy. The crisis it is creating for itself in social services can only get worse.

I shall not speak on regional policy, because I have spoken on that subject many times. However, I am glad that the hon. Member for Wrexham (Mr. Ellis) has now joined the ranks of those of us who are critical of regional policy. It is significant that we have not heard how the SDP-Liberal alliance would face up to the problems of Wales.

The regional problems of Wales are not just linked to those of the United Kingdom, but are part of an international crisis of unevenly developed regions. In many respects the Welsh economy is over-developed. It is a highly developed, sophisticated, specialised economy and that is part of its problem. Our concern is that that economy comes increasingly under the control not of London, or even of Brussels, but of multi-national capital and a Government who are determined to reduce public sector jobs. The result is an even greater degree of outride control over the economy and far less control by the working people of Wales, who actually produce the wealth of that economy. It is always they who are called upon to make sacrifices by Conservative Members, as if the future development of industry depended entirely on low wages.

I want to speak about education, which has been referred to by several hon. Members. I do so not in a spirit of political partisanship, but in the spirit of my previous incarnation, because I used to be a teacher. I am deeply concerned about the recent statistics that show in detail what many of us have feared over the years—that measured objectively the standard of education in Wales is declining. That is a regular theme of Conservative politicians.

I am an avid reader of all the news releases from Conservative Central Office. Last Friday the Under-Secretary of State for Education, the hon. Member for Brent, North (Dr. Boyson), went to the annual dinner of the Conservative Association in Caerphilly. He talked about the high regard that Wales had always had for education and the great Welsh tradition of learning and excellence. If he had only read more carefully the surveys produced by the assessment of performance unit he would have seen that all the talk of the magnificent Welsh education system is mythology. The House must be prepared to undermine and destroy that myth. References to the quality of the Welsh education system mask the performance of that system. My remarks are directed not merely at the Minister—we have a Minister who is respected in education circles in Wales because of his experience—but at the Welsh joint education committee, at Her Majesty's inspectorate in Wales, at the Welsh teaching unions and at all parents and teachers. We should face up to the reality that we do not now have an effective and egalitarian education system.

Two recent reports show that that system needs to be fundamentally reviewed. Perhaps the Minister will indicate whether he is prepared to consider such intervention. I refer not only to expenditure, but to the fact that we must face up to the practices of schools, the way in which they are run, the ethos of schools and their educational objectives.

There are about 220 comprehensive schools in Wales. One problem is that we never have enough information about how each school operates. I have had to generalise, and I have not referred to specific schools. I can think of several Welsh comprehensives that are doing magnificent work in difficult circumstances. I think, for example, of the comprehensive at Treorci in the middle of a relatively deprived area in the Rhondda. It has developed a curriculum in Welsh studies and so on, and I should like to see many other schools develop that. I think also of denominational and Roman Catholic schools in Wales and many of the Welsh-medium schools, where the commitment and work undertaken by teachers must be admired.

Hon Members should consider the latest inspectorate report on the fourth and fifth years, which shows that one-third of "less able" pupils—I do not like that term—who do not perform at the highest academic level are absent from school in any one week. No more than 60 per cent. of CSE and non-examination pupils have an overall level of attendance. Absenteeism has become so bad that the inspectorate has had to recommend that teachers should take the register not only at the beginning of the day, but at the beginning of every lesson.

However, we must go beyond superficial analyses of what used to be called truancy and assertions that parents should get their kids to school, and ask why children reject the schooling on offer. The answer lies in the emphasis that is still placed on the more able pupils. I echo what has been said about the way that we have concentrated on the more academic—I perhaps use that word in a slightly pejorative sense—aspect of education. We have tended to concentrate on the old grammar tradition. We have not been able to provide a comprehensive system in terms of content.

That problem does not affect only Wales. The recent report of the Select Committee on Education, Science and Arts contains evidence from the National Union of Teachers which highlights the fact that the school system in England and Wales tends to be examination led, particularly in the fourth and fifth year.

Dr. Roger Thomas

Does not the hon. Gentleman agree that the old grammar school tradition has been maintained in Wales in the so-called bilingual or Welsh schools? They are really back-door grammar schools. They bear the most guilt for maintaining the old tradition. However, genuine secondary schools are trying to act comprehensively.

Mr. Thomas

I cannot for a moment accept that. Some of the Welsh-medium schools are to be criticised just as much as other secondary schools for their policies of setting, streaming and grouping. The hon. Gentleman cannot pick out one aspect and say that that is the problem. The last thing that I want is an elitist form of Welsh-medium education. The statistics for Mid-Glamorgan—and increasingly for South Glamorgan—show that the majority of pupils in Welsh-speaking education come from working class backgrounds and do not speak Welsh at home. Parents and children select Welsh-medium education not for elitist reasons, but because they want to become a part of their cultural and linguistic heritage. Who will deny them that?

Therefore, it is essential to consider the way in which schooling operates and to ask why children absent themselves from school. We should ask why the figures for absenteeism are so appalling. We must add to the figures for absenteeism those for non-certification. Today 25 per cent. of students leave school in Wales with no formal qualifications. That is an increase. When we talk about the pupil-teacher ratio improving we must realise that at the same time the proportion of those leaving without qualifications has increased from 23 per cent. to over 25 per cent.

Mr. Grist

The hon. Gentleman is right. If there is enormous absenteeism, concentrated largely among the low achievers, and if there is a record pupil-teacher ratio, that must mean that those pupils who stay at school have an exceptional pupil-teacher ratio. In that case, why are we not getting even better results? Why are we still getting such poor results? I am bemused.

Mr. Thomas

I shall come to that. The paradox is that on the latest figures the A-level results have improved. Those who enter are doing slightly better, but the crucial issue is that at the same time the number who do not enter is also increasing. So we have a repeat of the grammar-secondary modern divide, the bilateral divide, within comprehensive schools. That is the crux of the problem.

I quoted a figure of 25 per cent. leaving school with no qualifications. In the same period the English figure fell to 12 per cent. while the Welsh figure went up. We exchanged questions and answers about this previously in the course of Welsh questions. But we have not yet faced up to the causes. It cannot be written off in terms of economic environment or class background. Goodness knows, we have plenty of indicators of relative deprivation in Wales.

The most surprising statistic is that there is an important difference between what happens at 16 and what happens at 11. The 1972 "From Birth to Seven" survey shows that Welsh children scored well above the English mean on general ability, were substantially above the English mean on arithmetical ability, and were only slightly below the English mean on reading. The assessment of performance unit primary survey on language performance shows that Welsh children at 11 have slightly higher mean writing and reading scores than those of England. The APU tests of age groups of examinees and non-examinees at 15 show that children in Wales had the worst performance at mathematics of any British region. This is confirmed in Cockcroft. Out of the five regions examined, the mean scores of Wales are the lowest or equal lowest on 13 of the 15 APU scales. Not only have we had fewer examination passes because fewer pupils entered, but on the APU data fewer pupils have been capable of passing. Those APU figures, and there are more to come, indicate that we are deliberately disabling our pupils at secondary schools. My major point is that we must consider this urgently. In some contexts this is a matter of resources. However, it is not just resources, but the actual practice of schools themselves. I do not want to turn this into a party political discussion on the Labour control of certain local education authorities in Wales, although it might be argued that because of the kind of policies pursued by the Labour Party in some authorities there has been less attention to the development of schools than there should have been.

I want to stress that we have had a deliberate perpetuation of the worst forms of grammar school provision and the concentration on a particular area of achievement in terms of the pupil profile, as it were. As a result we have created a system that is nothing more than a bilateral system on one campus. The sooner we face up to this in terms of readjusting the system, the better for all the children in Wales.

It is not simply a matter of examining individual schools. We had the Loosemore study by the Schools Council, but that concentrated on a small segment of the 220 secondary schools. We must consider the issue in depth. The Minister should at the minimum have discussions such as the previous Minister had when teachers, parents, the inspectorate, the Welsh Office and educationists came together to thrash out the issues.

We have to go beyond that and find ways of making the curriculum development and assessment procedures in Wales meet the crisis in the education system. There is a responsibility on the Welsh joint education committee to give priority to assessing why its policies have failed. It is a matter not just for the Minister, but for the WJEC. The Welsh schools inspectorate should become more self-critical and far more aggressive in its work.

The heads of schools should bring the teachers together within each school and consider whether they are providing the right kind of education, the right kind of curriculum and the right kind of assessment. They should ask themselves what they are doing through their own performance as an education community. The governors and the whole of the community of each school should also be involved in the process. This is at least as crucial as the issue of parental choice and information about schools. The schools themselves should reassess their performance, but we have to go beyond that and have a national reassessment of the role of Welsh education.

For the last time this evening may I praise the Minister? I read carefully speeches by Education Ministers, The speech which the Under-Secretary of State for Wales, the hon. Member for Cardiff, North-West (Mr. Roberts), made last Monday to the inspectorate at Ferryside is the kind of speech that ought to be covered properly in the Welsh media, but was not. There are other speeches, !;tich as the one at Pontypool, which are over-covered in terms of a rational editorial approach. In his speech at Ferryside the Minister faced up to the situation. I should like to quote his speech to him: We have much to be proud of in the schools in Wales but I'wonder whether we have not lost the edge we used to believe we had over the rest of the country. Certainly many people think so. It is worrying to see accumulating evidence of underachievement amongst pupils". The Minister went on to refer to the achievements of the Mold conference in 1978 and then to challenge the inspectorate to face up to the issues. I do not want to quote more of his speech back to him, but I hope that he will repeat some of these things in the House tonight and that he can take an initiative on Welsh education that some of his predecessors should have taken.

7.59 pm

Dr. Roger Thomas (Carmarthen)

I will not follow the hon. Member for Merioneth (Mr. Thomas) in his discussion on education. He made a thoughtful speech and one well worth listening to.

On 9 March, if the Chancellor runs true to form, there will be introduced further measures to widen the gap between the rich and the poor, the haves and the have nots. I have great sympathy for Tory Members frantically nursing marginal seats who are trying to fashion a strategy to distance themselves as much as possible from the actions of the Chancellor, which will be more characteristic of the Japanese heritage than of the Anglo-Saxon one of stiffening the upper lip.

There is little doubt that a pay and prices policy, sustained and fostered by public understanding and appreciation of its fairness, is an integral part of our approach to putting Britain right and on its feet again. In a recent economic debate my right hon. Friend the Member for Bristol, South-East (Mr. Benn) said that that will never be achieved without the conscious planning of our own resources to meet our needs. Yet how can such a worthy, desirable and succinct expression of our needs be contemplated while wages are left to the jungle of free collective bargaining? We pray for order, yet so many are prepared to leave the fair distribution of earnings to be subjected to utter disorder.

The Secretary of State made great play of the money that is chanelled into the building of factories and the record number of inquiries that prospective, and possibly genuinely interested, industrialists have made about the occupancy of those factories. Equally, one cannot but, be depressed about sites being earmarked and factories built where there are already several factories which are either unoccupied or which have been only a temporary source of employment, the companies having found the going too hard and the economic climate too harsh. Many factories have had to close after valiant efforts to keep goring. The dedication of the business men who ran them is not in question. Genuine success is so scarce that it stands out like a sore thumb in the general tranquillity and pacific condition of our economic stagnation.

The level of economic activity for 1982-83 will be lower than the previous year. At Welsh Question Time last week I quoted from The Sunday Times, which stated that Britain's industrial activity had peaked last autumn. I feel sorry for the Secretary of State that he does not have time to read The Sunday Times or perhaps the money to buy it. There will be even less chance of his doing so now because last week the price was increased by 5p—14 per cent.—at a stroke.

Mr. Nicholas Edwards

Surely the real problem is the heavy overmanning. Is that not one symptom of the troubles that British industry has had to face?

Dr. Thomas

The Sunday Times is not exactly a supporter of the economic policy being advanced by the Opposition.

One of the most disappointing of the Welsh Office's reactions of the past year was its response to the report of the joint working group on health education in Wales. It would be difficult to find a response so myopic and at the same time so irresponsible and insensitive, but once Ministers insisted that its terms of reference included the proviso that existing financial constraints be completely overriding, it was like loading lead weights to the water shoes of a cross-Channel swimmer.

I have great respect for all members of the working party for they boldly stated on the second page of the report—I am glad to say that the report was bilingual—that their terms of reference had had a real restraining effect upon their work. They all longed for a more radical and far-reaching approach to help matters in Wales, and it appears that more radical changes were the deep-down desire of many besides the one gentleman who produced the minority report, whose brave wisdom had been ignored.

The utter imbalance of the distribution of health education staff in Wales was noted by the previous Administration as far back as 1977. The previous Labour Government made definite recommendations that each health authority should have a minimum complement of personnel specially trained in health education and directly responsible to the area medical officer.

In Wales there are special needs of dental health education, for we are an area in which far too much radical and not enough conservative dentistry is carried out. This is about the only area that I can think of in which policies for Wales are not conservative enough.

There was a call for a mechanism of initiative and coordination specific for Wales, and the working party made a series of recommendations. I concur with the working party's statement that members of the caring professions are not aware of the full range of services that are available about which they should be advising patients and clients.

The working party stated that the leadership and encouragement of which the Welsh Office is capable should be considerably strengthened. Will the Minister list some of the highly desirable innovations that are contained in the report, or are they like job opportunities in Wales, which are jammed in the pipeline?

In a very brave speech recently, which Government supporters found great difficulty in listening to, let alone accepting, the hon. Member for Chippenham (Mr. Needham) advised the Chancellor to ignore the pessimistic advice of his advisers because 9 March would be his last chance to restore credibility in most sectors of our manufacturing base, and to understand that after three years of Tory Administration the work force had realised what a different world it found itself in.

The hon. Member for Chippenham referred to Lord Shaftesbury. Had he been able to comment upon the miserly and near-detestable manner in which this Administration are handling the long-term unemployed, the weak and the needy, he would probably have said that the Tory Party had utterly lost its way and that compassion had been cast aside. However, the months are passing and the time will come when the electorate will treat the Tory Party and its schizophrenic leadership with similar disdain.

I agree with some of the remarks that my hon. Friend the Member for Pontypool (Mr. Abse) made about the fourth Welsh channel. His critical but fully justified comments appeared this week in the Western Mail. I wrote in similar terms three weeks previously in the only Welsh weekly newspaper which has a widespread circulation throughout the Principality. Of course, all my allegations were denied by the fourth channel powers-that-be. They say that they have taken upon themselves grave responsibilities. It appears that the independent producers have emerged on top and that they are running the fourth channel. We hear talk of domination by small intercommunicated groups, and this we cannot deny. It appears that the policy of the Welsh fourth channel is, "You scratch my back and I will scratch yours".

Mr. Deputy Speaker (Mr.Bryant Godman Irvine)

Mr. Delwyn Williams.

Mr. Roy Hughes (Newport)

On a point of order, Mr. Deputy Speaker. This cannot be right. The hon. Member for Montgomery (Mr. Williams) has only recently entered the Chamber. I have been in my place for four and a half hours.

Mr. Delwyn Williams (Montgomery)

I have been in the Chamber for two and a half hours, Mr. Deputy Speaker.

Mr. Deputy Speaker

Order. It has always been the custom to call Members from each side of the House alternatively.

Mr. Ray Powell (Ogmore)

Further to the point of order, Mr. Deputy Speaker. The day before yesterday this issue was debated on a point of order and Mr. Speaker ruled that hon. Members would be expected to stay in the Chamber to listen to the debate, especially to the Front Bench replies. I think that your attention, Mr. Deputy Speaker, should be drawn to the fact that you have called an hon. Member who has not been in the Chamber for long and who has listened to hardly any of the debate.

8.10 pm

Mr. Delwyn Williams (Montgomery)

I was here from the beginning of the debate until approximately 6.30 pm. I was very disappointed to hear the right hon. Member for Rhondda (Mr. Jones) make such a disappointing speech, even by his own standards. I thought I should hear a constructive plan to put right the lack of youth employment in Wales. I thought we would be told where some of the £8 billion would be spent in Wales. I wonder whether he can tell the young people who came to the House today where he will get the £8 billion. Will he get it from some banker? I think not. Will he go to the International Monetary Fund? I think that is perhaps his plan.

If you are a bank manager you look at your client's previous record before you advance him any money, and on the strength of his party's record, the right hon. Gentleman would be lucky to get a Barclaycard for £50, let alone £8 billion. If he does not get the money from the International Monetary Fund will he look to the 85 per cent. of working people to raise the money? If he does, how does he think they will react to hearing that they must pay an extra 12p in the £ direct taxation? Will he tell the truth about the sham of £8 billion he is to get out of the sky? The International Monetary Fund will not give it to a party which lacks credit.

When it comes to youth employment we should tell young people the truth. They should go into Europe and look at young people in Germany and France. I know the truth hurts but you may as well listen to the truth. If you go to France, Germany and America you will find young people suffering as our young people do. If you believe that there is no compassion for those young people on this side of the House you are very much mistaken. But let those young people look at the vast ranks of Socialist Members—all four of them—here today to show their concern for the young people of Wales.

Let the young people ask the question: what would have been their job prospects if the Opposition had been in control over the past two years, running to the IMF to borrow more money for their generation to repay in the next 15 or 20 years? We are concerned with creating real jobs and prospects for young people. We are building their future.

I will tell you some home truths. In 1976 it was your party who produced a so-called secret working document on the subject.

Mr. Ray Powell

On a point of Order, Mr. Deputy Speaker.

Mr. Deputy Speaker

Order. I have no party.

Mr. Delwyn Williams

Forgive me, Mr. Deputy Speaker. It was the party of the hon. Member for Ogmore (Mr. Powell) that produced a so-called secret document which forecast 21/2 million unemployed people by 1981. How right he was. He knew the facts but sought to conceal them. You sought to conceal the facts to such an extent that that squalid forecast appeared in The Observer. It was based on facts. It said that there was a baby boom in 1963 and there was. One million young people of that baby boom are now looking for work. That fact was known then and it is known now. You concealed the facts that the trade union—

Mr. Ray Powell

On a point of Order, Mr. Deputy Speaker. On every occasion that I have mentioned "you" I have been immediately brought to order. Why is it that the hon. Member for Montgomery (Mr. Williams) has been given licence, after he has been missing for three hours and 10 minutes from the Chamber, repeatedly to refer to you, Mr. Deputy Speaker, without being brought to order?

Mr. Deputy Speaker

I had drawn the attention of the hon. Gentleman to one misdemeanour. I thought that was enough for the moment.

Mr. Williams

I apologise, Mr. Deputy Speaker. I meant you no discourtesy, and I expected that you gave me some licence because of my relative inexperience compared to the hon. Member for Ogmore. I am grateful.

The Opposition support the trade union movement, which has been the greatest destroyer of youth employment by asking for and getting inflated wages. Youth wages have risen by 440 per cent. since 1970. I know that the Opposition do not like facts. Those wages have risen on the insistence of the trade union movement, backed by the Opposition. The Opposition have helped to price young people out of the market by making the average wage in this country twice what it is in Europe. When the Opposition talk to unemployed people, let them confess their part in the shameful con trick that has been played on them.

It is self-evident that automation has also played its part and will increase. Although manufacturing industries have been hit recently, service industries will be hit as word processors take away the jobs of many clerks and typists. There is no point in anyone telling young people that jobs will be there. They manifestly will not be there. We should be sharing the work out. We should say to the trade union movement that we should work together, share the work and achieve early retirement. Fewer married women should be working, especially those with children under the age of seven. Any woman with children under seven has a duty to look after them and instil discipline into them.

Many new jobs are to be found in Wales if we look for them. For instance, 25,000 new jobs will be generated in the tourist industry in the near future. [Interruption.] If one studied the facts and were helpful towards young people instead of being obstructive——

Mr. Alec Jones

rose——

Mr. Williams

We have had no help from the Opposition in this debate and no constructive suggestions; I certainly would not expect anything constructive from the right hon. Member for Rhondda—[Horn. MEMBERS: "Give way."] I certainly will not give way. I suggest the hon. Gentleman goes back to the north-west fringes.

The hon. Member for Merioneth (Mr. Thomas) belongs to a party that militates against the tourist industry in Wales. By his inflammatory language he indirectly encourages people to carry on in an anti-social manner which discourages English tourists. Welsh tourism suffers. English people do not want to go to Wales because their houses may be burnt down or their cars damaged by vandals because they have a Union Jack on them and road signs are damaged. The Labour Party is the greatest destroyer of youth employment in Wales, as the right hon. Member for Rhondda well knows.

Mr. D. E. Thomas

I have been involved for the past eight years as the Member of Parliament for Merioneth in trying to secure funds for many tourism projects, some of which have been mentioned this afternoon, and I am anxious that the tourist industry is developed to provide secure and permanent employment. I have certainly spoken out against low wages in the tourist industry and my position is well on record. If the hon. Member for Montgomery (Mr. Williams) had been here for most of the debate he would know that many constructive points were made. Many more would be made if he were not rabbiting on now.

Mr. Williams

I suspect that the hon. Member does more rabbiting during the course of the day than any poacher in Powys.

The Secretary of State was kind enough to say that 6,500 new jobs had been provided in Mid-Wales and I am grateful to him for that statement, as I am for his continued support of industry in Mid-Wales.

It is with a sense of genuine national shame that I mention the declaration of Wales as a nuclear-free zone. As a nation, are we now saying that we rely on our compatriots in Berkshire and Cambridgeshire for national security? Are we now saying that we rely on the Scots, who were the hosts of the Holy Loch base, and that we lack the guts to make our contribution to the defence of this nation? Will the Russians recognise Wales as something special? I do not believe they will. The people of Wales will continue to play their patriotic and courageous role, as they have always done, in the defence of our nation.

The role of the Welsh people in the defence of Britain stretches from the heroes with a record number of Victoria Crosses at Rorke's Drift, to the hills of Korea. For this nation to be seen as trying to get out of its moral duty to the rest of the country is something that I abhor and that I hope the local authorities will live to regret.

Labour Members who pretend to welcome this development as a step towards some sort of unilateral disarmament are hypocrites because, when they were in power, they consistently supported a nuclear deterrent. They even went so far as to spend £1 billion on the Chevaline project to make Polaris more effective. That is what they do when in Government but, when in Opposition, they advance a different policy to the people of Wales. That policy will not wash again.

A serious consequence of the declaration of a nuclear-free zone in Wales is the demoralising effect that it will have on the morale and organisation of our civil defence officers and administrators in the Principality. The ostrich mentality is a great handicap to our emergency services. Such services in Wales could be vital in a time of nuclear war, if that sad event ever occurs. In such event, Mid-Wales must be ready to receive the Birmingham overspill. The local authorities have passed the resolutions and demoralised their civil defence organisers and emergency services. I only hope that they will rapidly redress that situation.

I now turn to a more parochial issue which is of great importance, not just to Wales, but to the rest of the United Kingdom—the vexed question of the Welsh schoolteacher, Wayne Williams. He was sentenced to nine months imprisonment for causing £43,000 of damage to public property. Unbelievably, a completely unconstitutional appeals committee of the Powys county council, comprising only five people, reinstated him. The Secretary of State has seen fit today to issue to him a formal grave warning as to his future conduct. Regrettably, the Secretary of State could not prevent him from teaching in Wales.

I fully appreciate the dilemma of the Secretary of State for Education; he had a difficult task in balancing the situation. He had to decide whether to make that man a martyr or to lower the education standards by allowing him to return to the teaching profession. He also had to decide whether it was his duty, morally or otherwise, to interfere with the affairs of a democratically elected local authority. It was no easy decision. However, I wholeheartedly accept the decision the Secretary of State made.

However, I wonder what the future position will be. I only hope that the High Court hearing will allow the full county council—all 54 members—to vote on this issue. They have so far manifestly not debated it or had the opportunity to vote on it.

When the county council appointed Mr. Williams as a teacher it was not told that he had eight previous criminal convictions. The European Court of Human Rights today approved the principle that there should be respect for the philosophical convictions of parents if they did not want their children subjected to corporal punishment. The same court would respect the philosophical conviction of those parents not to have a teacher in charge of their children who has at least nine criminal convictions, a man who has been to prison at least twice and once to a detention centre.

Returning to local affairs in Mid-Wales, it would be remiss of me if I did not remind the Secretary of State that he should continue the intermediate area status for Mid-Wales. It would be disastrous if that area ever lost it. It would lose its selective grants from the Welsh Office, tourist grants and rights to claim most European grants. The latter two side effects would be a drastic disadvantage to my area.

It was argued that if Telford were given that status and my area was not, or vice versa, it would create an imbalance. I do not accept that argument because, for example, Telford would not lose tourist grants. Not many people would visit Telford on a sunny afternoon to see its delights.

When the Welsh Select Committee investigation into EEC aid is completed, I hope that we in Powys will take advantage of the recent European directive and support a programme of three-year projects which will bring prosperity to my area.

That will mean that we can negotiate direct with Brussels and by-pass the Welsh Office. If we are successful, I hope that our Secretary of State will not unfairly penalise us by the principle of additionality. If we take the trouble and time to obtain money from Europe, let it be treated as a bonus for the people of Powys and not as an indirect subsidy to the United Kingdom Government. I feel strongly that additionality should be outlawed by legislation so that the grants from Europe become what they are intended to be—a bonus for the more disadvantaged areas of our Principality.

8.28 pm

Mr. Geraint Howells (Cardigan)

I owe an apology to you, Mr. Deputy Speaker, and to right hon. and hon. Members, because I failed to hear the opening speeches, due to a prior arrangement. However, I will ensure that I read those speeches in Hansard tomorrow.

With the continuing unemployment problem in Wales hanging over our heads, which shows a trend towards long-term unemployment, is it not time that politicians on the Right and Left put aside their ideologies and concentrated their minds on the practical problems of how to create work for the unemployed and how to improve the quality of life for those who are unemployed through no fault of their own? We spend a great deal of time in the House apportioning blame to one cause or another, while the dole queues grow and the threat to the social fabric of this country increases daily. The great weakness of our present system of adversary politics is shown when two political parties fight over every issue without attempting to look for common ground that could provide solutions for pressing problems.

The situation in Wales is now so grave that it will be necessary, sooner or later, for the Government to put aside their aversion to public investment and inject money into capital projects to improve industrial prospects and cut down unemployment. As a Member for a rural constituency, I am particularly aware of the effects of the present recession on the farming communities and those living in smaller towns and villages. I therefore welcome the Secretary of State's intention to review the work of the Development Board for Rural Wales, which has done such sterling work in the Mid-Wales area. I hope that the right hon. Gentleman will recommend that more funds are given to the board so that it can continue its work and that the boundaries can be extended to include, in particular, those areas in North Pembrokeshire and Camarthenshire that come into the catchment area of Cardigan and LampeterLlandysul where the latest unemployment figures are 22.5 and 23.4 per cent. respectively.

It is important that more light industry is encouraged and that communications, both road and rail, are improved. I make a strong plea for the preservation of the rural railway lines throughout North, Mid and West Wales; they provide a link between communities and are undoubtedly a social necessity. The recent report commissioned by the DBRW shows that an investment of £7.5 million could reinvigorate the whole system west of Shrewsbury. Such an investment should not be delayed. This kind of project could provide local employment and give large areas of Wales a link with national transport networks and the possibility of a share in any future prosperity. It would be tragic if the outcome of the dispute between British Rail and ASLEF were to result in further closures, as has been hinted in some quarters. I trust that the Secretary of State, in his wisdon, will resist any such moves by British Rail.

I know that the Secretary of State is well aware of the importance of the agriculture industry to the Welsh economy. According to official figures, farming, fishing and forestry contribute about 41/2 per cent. to the gross domestic product of Wales. This is twice the percentage for the United Kingdom as a whole. The mainstay of agricultural production in Wales is the livestock sector. This, unfortunately, is the sector, apart from sheep, that has seen the greatest fall in production over the past few years.

It is true that farm incomes have shown a slight improvement, according to this year's price review White Paper, but this represents only 1.9 per cent. in real terms. Production continues to fall. The reason, I am convinced, is that the industry has lost a great deal of confidence and is afraid to invest more money or to expand. It is also fair to point out, as the president of the National Fanners Union of Wales has done this week, that the White Paper figures are not particularly good when one realises that current incomes are still 51/2 per cent. below 1976 levels. Farmers have had to borrow heavily to cope with rising costs. Despite heroic efforts to improve their land and productivity over the years, they have had little reward in terms of return on capital.

Hill farming constitutes a large part of Welsh agriculture. The viability of this kind of farming depends on grants from the Government and from the EEC. At the same time, it is necessary to recognise the importance of this sector to the industry as a whole. It forms an essential link in the livestock production chain. On its survival depends the survival of the rural community in many parts of Wales. In rural Wales, 20 per cent. of employment comes from agriculture. It is an important factor in stemming depopulation and keeping whole areas alive. Farmers also preserve the countryside by their cultivation and care of the environment.

The current edition of the Farmers Guardian examines the dangers facing hill farming and states: The balance of these and other arguemnts must be that i/ is in the national interest for us to maintain at least as much hill land as at present in food production. The contribution from the public purse is an investment. The contribution to the national larder from the energy and skill of the men and women who farm soave of our most difficult land is beyond price". I fully endorse those wise remarks. The Secretary of State should bear them in mind when pressing the case for Welsh farming.

I should like an assurance from the Secretary of State, or the Minister, that the British Government are putting the case forcefully on behalf of the marginal land farmers to the European Commission in Brussels for the extension of the existing less-favoured areas. I had the privilege a week or so ago of going to Brussels, and I was told by one of the leading officials in the Commission that the British Government were entirely to blame for the fact that the marginal land problem has not been solved. It is up to the Minister to deny that, but that is what I was told.

I understand that about 700,000 acres of disadvantaged agricultural land have been identified as a result of the recent survey carried out by the Welsh Office agricultural department. It is vital that the Government should now press our claims in Europe. As has been pointed out, Z5 per cent. of financial aid will come from the EEC, while the remaining 75 per cent. could largely be offset by food production on land designated for such support. This financial help would be another step in the right direction in preserving Welsh rural life.

I make a plea to all hon. Members, in Government, in Opposition and in all the minority parties, and also to the Chairman of the Welsh Select Committee, the hon. Member for Swansea, East (Mr. Anderson). I have had the privilege of sitting on this Committee for over two years. It is doing good work. A strong case could be made for all parties to be represented on the Welsh Select Committee, the Tories, the Labour Party, the Liberals, the SDP and Plaid Cymru. We must bear in mind that the discussions of the Committee range over the whole spectrum of Welsh life. It would seem only fair to the electorate of Wales that there should be proportional representation of all political opinions in Wales at this difficult time, so that the recommendations of the Committee could reflect more fairly the concern of those whom Welsh Members represent.

Plaid Cymru Members of Parliament, in their protestations, often forget to mention that they have representation on the Select Committee on Education, Science and Arts and that as members of a minority party they have done well under the present system, but that is not an argument that I wish to pursue. I just want to put the case that as the Welsh Select Committee was presented by the Government as an alternative to a Welsh Assembly, all political parties should be represented on it if we believe in democracy.

Mr. Delwyn Williams

Is the hon. Gentleman saying that he is prepared to give up his seat on the Welsh Select Committee in favour of an SDP representative, which now has a majority representation in Wales?

Mr. Howells

The hon. Gentleman has got it wrong. I hope that he believes in democracy, and I am sure that he holds a similar view to mine, which is that Members of all shades should be represented on the Select Committee on Welsh Affairs. To answer his question, there is no need for me to give up my seat. It is up to the Opposition and the two major parties to make sure that they accede to the appeal that I have just made.

8.40 pm

Mr. Ray Powell (Ogmore)

I am perturbed that hon. Members can walk into the Chamber at this late stage and be called to speak when some of us who have been here since Prayers at 2.30 pm are still waiting to be called. I prayed this afternoon at 2.30, but clearly my prayers have not been answered until twenty minutes to nine. Other hon. Members who did not bother to come for Prayers have been called before me. With all due respect to the hon. Member for Cardigan (Mr. Howells), if I had not been here for the two opening speeches of the debate, I should have declined the opportunity to speak until those who had been here from the start of the debate had spoken.

I am sorry that the Secretary of State has left the Chamber for the time being, because I wanted to tell him that of anyone I know he can compress the greatest number of words into the smallest ideas. Today he took 54 minutes to do just that. I listened attentively to him in the hope that I could have informed the thousands of YOP demonstrators who were outside the Commons today, and the hundreds whom we addressed in Westminster Hall, that there was a future for them and that the Secretary of State for Wales would provide a future for the young Welsh unemployed. We listened to 54 minutes of a boring speech from the right hon. Gentleman. His speech had no substance. He had nothing to offer to the young people of Wales. In particular, he had very little to offer to others——

Mr. Michael Roberts

rose——

Mr. Powell

The Minister will have ample opportunity to speak later.

Mr. Roberts

I thank the hon. Gentleman for giving way, and I shall take only a moment. In fairness to my right hon. Friend the Secretary of State, I should say that he left some of the points about opportunities for young people for me to deal with at the end of the debate, and I hope that my comments will help.

Mr. Powell

I thank the Under-Secretary. I am glad that we shall get something out of a full Welsh affairs debate to tell the young people to whom we spoke this afternoon, because their problems are the ones for which the Government have to find remedies. The Under-Secretary should look at the suggestion by the Secretary of State for Employment about the payment that young people will receive—not the £23.50 or £25.00 that they receive now, but the £15 to which it has been reduced. The young people are critical, not only about the fact that they do not have a job, but that they do not have sufficient money to live on.

The hon. Member for Brecon and Radnor (Mr. Hooson) has left the Chamber. I am sorry because I wanted to ask him about Mr. John Jones, the chairman elect of the Welsh water authority. Is he the same John Jones that I, as a Member sponsored by the Union of Shop, Distributive and Allied Workers, know as a divisional officer in Wales and the West, because that man would have been an ideal appointment to the chairmanship of the Welsh water authority? Whoever this Mr. John Jones is, I hope that he is not another Tarzan or another Tebbit so that the industrial relations that we have built up with the Welsh water authority will not be ruined overnight.

My right hon. Friend the Member for Rhondda (Mr. Jones) went into some detail about his trip around parts of Wales on a bike. His trip illustrated in graphic detail the ridiculousness of the statements and suggestions that have been offered to the unemployed in Wales. We know the figures. We have heard them all. They were set out in a debate about unemployment and employment opportunities in Wales that I initiated on 14 December. The total of Welsh jobless is 174,878,—16.1 per cent. of the population. There are 8,041 school leavers seeking work.

When the Secretary of State began his remarks, he referred to the jobless and to what the Government are now doing to reduce unemployment. I should like to quote from a reply to a parliamentary question on 15 February about unemployment in Wales from 1960 to 1981. The Secretary of State gave a table in that reply showing that on 14 June there were 54,107 males and 25,925 females out of work. On 11 June 1981, there were 107,080 males out of work and 43,272 females out of work. A similar answer on the same day showed that there were 613,000 males and 409,000 females employed in Wales in 1979. For 1981—he could not give the up-to-date figure—there were 541,000 males and 373,000 females employed.

The unemployment rate has doubled for males and has practically doubled for females in the two years of the present Government and, in addition, employment in Wales for both males and females has been reduced by about 100,000 males and 23,000 females. Whatever the Secretary of State's excuses, he cannot get away from the figures he furnished me with last week.

The figures for unemployment announced this week by the Department of Employment for the whole of Wales are available for hon. Members and for the public to see. No one is trying to gloss over that, but the Secretary of State is trying to confuse the issue entirely.

In Mid-Glamorgan there are 33,686 people looking for work. That is 17.31 per cent. of the workforce. In my constituency in 1981, following the catastrophic preceding year, 18 factories were closed. Ten are still empty. The rateable income on those factories has been reduced by £25,000, plus the loss of rateable revenue from Caeru and Coegnant collieries, which have been closed. The unemployment problem in Ogmore is becoming so great that the Chancellor must seriously consider the level of jobless when drafting his Budget of 9 March.

On Tuesday evening the Prime Minister, at an engineering employers dinner in London, warned that the Budget will be more severe than industry had hoped. She said that unemployment recovery would lag behind the recovery of output. The fall in oil prices two weeks ago is her excuse for another no-hope Budget. Then she talked about resisting the demand for easy options and said that it is the set of the sail and not the gale that determines the way she goes. After the past two years of weathering the gale of her policies and the way she has set the sail, I know where the electors will determine that she goes—unless her friendly wets get to her first—because there is one sailor boy who would love to drop her anchor.

Conservative Members must realise that Europe is not the answer to the problem. It is partially the cause. West Germany's Chancellor Schmidt warns of society being in danger with well over 10 million out of work and pleads with all, including the Prime Minister, to face up to the unemployment crisis with great realism before it explodes.

What do we hear from the right hon. Lady? On "TV Eye" she said that there was no need to go on and on about unemployment unless we had something helpful to suggest. I do not understand why she does not listen to my right hon. Friend the Member for Rhondda, the TUC, the CBI or Labour Party researchers. Perhaps her advisers are not telling her the truth or are not cataloguing the ideas, proposals and alternative economic strategies that have been suggested by all those sources, as well as by Labour Members, right hon. and hon. Conservative Members and even by those around the Cabinet table. Her Government's policies are not valid or workable. They are not creditable and they are definitely not curing the disastrous, detestable and destructive unemployment that is crippling Wales and the whole country.

I wish to speak about the death on the dole of 50,000 people, many of whom have been Welsh. I see that the Under-Secretary of State for Wales with responsibility for health is in his place. At Question Time on 15 February he stated: I do not agree with the hon. Gentleman that there is any straightforward connection between the nation's state of health and the unemployment figures, although I know that reports have been produced on the subject."—[Official Report, 15 February 1982; Vol. 18, c. 13.] Perhaps I could draw his intention to the direct consequences of the Government's policies on Glarrhyd hospital in my constituency at Bridgend, which has already been referred to in a reply to an intervention during the speech of my right hon. Friend the Member for Rhondda. It has had to close a psychogeriatric unit to make room for young psychiatric patients. The number of outpatients has increased by 50 per cent. Most of the new patients have come from the Neath and Port Talbot travel-to-work black spots, where 20,000 people are unemployed. That area includes Maesteg, Ogmore, Garw and Bridgend. The hospital administrator, Drew Kimber, expects that number of patients for the psychiatric ward to increase as people leave the dole queue for that ward. He has said that it has been established that after a time lag of 18 months after becoming unemployed some people become psychiatric.

Kimber warns that some patients who have been left in the community should be in hospital. They cannot cope. The hospital is old and should be reducing the number of beds. The knock-on effect on the family that suffers financial and other stress, needs to be considered, too. The spin-off effects have been constantly drawn to the Government's attention since July 1980. There are increased deaths, ill health and crime, but the Government, like the Under-Secretary, play down the issue.

In a reply to my hon. Friend the Member for Bolsover (Mr. Skinner) the Prime Minister said that it was well researched that those with poor health and social problems tended to he more often or more readily unemployed. The unemployed, she said, may have more time to bring their health or social problems to the attention of health or social services.

A spokesman at Guy's hospital, London, at the unit for the study of health policy stated: The experience of the South Wales Hospital is repeated throughout the country and reinforces the view that links between unemployment and illness are very real. I hope that the Under-Secretary will do some research and will realise the difficulties and problems of young people and the unemployed.

The YOP trainees in their demonstration today tightly stated that Cabinet Ministers who earn £534.70 per week cannot understand the difficulties and problems of young people who receive £25 per week. If some Ministers had to live on £25 per week, they might appreciate the problems and difficulties of young people.

Today I received a letter from one of my constituents. It is one of many that I receive. I expect that many hon. Members on both sides of the House receive such letters daily. The letter is a plea from a widow who writes: My husband worked for over 40 years, and regret to say he died in February 1976. I receive E29–60 widow's pension a week, plus £6.62 NUM pension, which make a total of 06.22 per week. I had a letter from the tax people stating that after 6.4.82 they will be taxing me on my NUM pension. Surely this is not right. I can honestly tell you I have great difficulty in making ends meet. I can well understand that. She goes on to say: I don't get any allowance for my gas until I reach the age of 60 years, then this will be debated between the NUM and the coal board. I have tried on numerous occasions to find work, but my age is against me. Also I am under doctor's orders not to do any heavy work as I am suffering with a bad heart. Such letters are depressing. Such people are distressed. We can see part of the reason why the psychiatric units in Glarrhyd and other areas are full.

It is time that I finished my speech. I accept that I have been speaking for a little while longer than some hon. Members would have expected, but I probably will have delivered a better speech than that of the Secretary of State for Wales, who took 53 minutes to tell us nothing. Having dealt mostly with the unemployed and their problems, I shall keep the rest of my speech for a future occasion when I hope that my prayers will be answered a little earlier so that I have more time.

We need a plan to end poverty among the jobless. The unemployed should qualify for the higher long-term rate of supplementary benefit after the first year of benefit. The cuts in adult and child rates for unemployment benefit should be restored and the value of benefits protected against inflation. Money saved through the abolition of earnings-related supplement and the taxation of benefits should be returned to the unemployed. Local travel facilities should be provided at concessionary rates for the unemployed. The allowance for young people on YOP schemes should be restored to its November 7.979 value—£30 at November 1981—and the right to supplementary benefit should be restored to school leavers.

Finally, I congratulate Wales on declaring this week that it is now a nuclear-free zone.

9 pm

Mr. Roy Hughes (Newport)

Perhaps the greatest scandal in Wales today is the level of water charges. Every day the West Midlands area draws 75 million gallons from the Elan valley, for which it pays £1 million per annum. Yet people living in the shadow of the reservoirs are charged more for their water than are consumers in the West Midlands. The same principle applies throughout Wales. Next year the average domestic water rate in Wales will rise to £79 compared with £65 in Birmingham.

Some years ago, to try to relieve the burden on consumers, the Labour Government introduced an equalisation scheme whereby richer authorities paid a levy into a central fund, from which the Welsh water authority benefited by £3 million annually, and it was intended to extend the scheme to bring lasting benefit to those suffering the most.

Instead, the Conservatives scrapped the system in one of their many acts of barbarism and complete disregard for the interests of the people of Wales. I have long recognised that in the present Government the blind are leading the blind, but the injustice of these charges to the people of Wales is so glaring that I should have thought that even a blind man could see it. The situation is the more ridiculous when one remembers that all three Ministers involved—the Secretary of State for the Environment, the Secretary of State for Wales and the Chancellor of the Exchequer—claim Welsh descent.

On a more parochial basis, the way in which ratepayers in Birmingham are treated is in marked contrast to the way in which those in Newport are treated. Both towns are major industrial centres, and, early on, each saw the need to make provision for future water supplies, but through various centralisation schemes the water rate in Newport has risen by an incredible 2,700 per cent. since 1960—and there is no water rate rebate for the needy. The amount increased from £1.93 in 1959–60 to £53 in 1982–83.

A similarly exorbitant pattern of increases has developed for sewerage charges. The water and sewerage charges for the average domestic ratepayer in Newport will be £96, compared with a borough rate of only £46. That figure is finalised by the 18 per cent. increase recently announced by the Welsh water authority.

Despite all the financial burdens imposed on consumers in Newport and the fact that Newport is the third largest town in Wales, it has no representation on the Welsh water authority. Why has the Welsh water authority been allowed to get away with such things? If rates were to increase in that way the Secretary of State for Wales or the Secretary of State for the Environment would soon put the commissioners in to take over the local authority concerned.

Those figures mean that water and sewerage charges in Newport are more than double the cost of all the other services provided by the borough authority—including housing, public health, swimming pools and parks, public works, a municipal bus service and a subsidy for the Welsh National Bus Company.

In addition, the economic and social development of the town must be considered, because this will provide new jobs, not only for the citizens of Newport, but for many thousands of people in the surrounding areas of South-East Wales.

Newport has done its best to persuade the Welsh water authority to provide drainage and water supplies for the new industrial areas. That work is particularly necessary if a number of low-level sites on the coastal belt are to be developed. They are the major industrial sites of the future. However, the Welsh water authority insists on leaving it to the Welsh Development Agency or to the local authority.

Newport is getting a very bad deal. In return for paying for its own water system a long time ago, it now has to subsidise other areas of Wales so that they have the same level of service. Greater help for and understanding of Newport's problem are needed, both by the Welsh Office and by the Welsh water authority. Secondly, local authorities in the West Midlands must be made to pay more for precious Welsh water than they have been doing. Thirdly, the overall efficiency of the Welsh water authority must be looked into. I protested about the authority's proposal to send out its own bills, but that protest was of no avail. That work had been done perfectly satisfactorily for many years by district local authorities.

New super divisions have been created and new offices to go with those new divisions—not forgetting the palace of bureaucracy in Brecon. Now there is to be further reorganisation and we seem to be moving from the ridiculous to the sublime. If the past is anything to go by, the more centralisation and lack of accountability that there is, the more prices to the consumer rise. Now, apparently, the process is to be completed by major decisions being taken in private, if the headlines in this morning's Western Mail are anything to go by. That is a disgrace, given that it comes from a Government and Prime Minister who talk about open government.

9.9 pm

Mr. Donald Anderson (Swansea, East)

I hope to deal briefly with three of the principal concerns of the people of Wales—jobs, housing and the environment in which they live. I wish to show the interlinkage between those three elements and the extent to which the Government do not appear to appreciate that link.

The job situation in Wales is desperate. At the last Welsh Question Time we were told the extent to which male unemployment in the Principality had increased since May 1979, when the Conservative Party came to office. In May 1979 the figure for male unemployment in my travel-to-work area was 8.3 per cent. That figure is now higher than 20 per cent. That increase of 150 per cent. illustrates the erosion of our manufacturing base. For the first time, skilled men face just as many difficulties as the unskilled.

Those figures are tragic, both in human and social terms. The situation peculiarly affects the long-term unemployed and the young, about whom my hon. Friend the Member for Ogmore (Mr. Powell) spoke. We know the long-term social effects on the young when they do not know the discipline of getting up in the morning and going to work. Although Wales has been exempt from the youth disorders that have affected other parts of the country, young and old in the Principality will eventually feel that the system is failing them if it cannot provide them with the decent jobs that they have come to expect.

To the tragic waste of human resources must be added the fact that Government sources apparently accept that for every unemployed person the Government lose about £5,000 per annum in tax receipts and payments. In addition, there are more pressures on the unemployed. It can no longer be said—as Conservatives traditionally say—that the unemployed are at fault. People do not have any choice, and they are being penalised and punished in various ways. It is no longer possible—as it was claimed—to be better off on the dole than at work. The gap between unemployment benefit and wages is the highest for more than 30 years. That is the extent of the social pressures on the unemployed.

Where will growth in the economy come from? It will not come from the private sector, because that is still largely shedding labour. As a result of the absurd decision to abolish exchange controls in 1979, it has been estimated that there has been a £5 billion loss in portfolio investments alone. That money might well have been used to stimulate jobs in the United Kingdom. Job stimulation will come not from exports, but from public investment.

The quality of housing in Wales is perhaps the lowest in the United Kingdom, and Wales has the highest proportion of pre-1919 houses. Astonishing figures have been outlined, which show the complete collapse of the public housing sector. Public sector starts have fallen from about 3,000 in 1979 to 2,000 in 1980 and to about 1,000 in 1981. In many local authorities discretionary improvement grants have virtually come to an end. Nevertheless, about 40 per cent. of construction workers in Wales are unemployed. Any Government with the necessary wit could put together the parts of the equation and provide jobs in the construction industry to improve the quality of our housing stock and to provide housing for those households that demand it.

I have made a pledge about time, so I must bring my remarks to an end. It is not the quality of our housing that is so worrying, but the quality of the environment. Could we not do what was done not only by Roosevelt in the 1930s, but in Amsterdam, where a forest was planted as a public works programme? Usually, the greatest dereliction as a result of industrial development is in places with the highest unemployment levels. We should get the young people, the skilled and the unskilled working together to improve the environment. Work on the environment and on housing is labour-intensive and would not add to our import bill. It would make a major contribution to relieving the greatest disaster facing Wales—the lack of decent jobs.

9.16 pm

Mr. Donald Coleman (Neath)

The debate has enabled us to range widely over a series of matters that are the concern of Welsh people. This in itself should leave no one in doubt about the significance in the affairs of Wales of the Welsh Office or of the importance of the responsibilities of the Secretary of State for Wales which, if exercised efficiently, can bring great benefit to Wales, but which, if they are not, can spell disaster for Wales and her people.

We heard a remarkable speech by the hon. Member for Merioneth (Mr. Thomas). I pay tribute to him for the thoughtfulness of his speech. We shall read it carefully and examine the points that he brought out in it. It is a pity that the hon. Member for Montgomery (Mr. Williams) was not present during most of the debate, because had he been he would have heard that speech. Had he done so, perhaps he would not have been quite so churlish as he was with the hon. Gentleman.

Unemployment is of the greatest concern to the Welsh people. My right hon. Friend the Member for Rhondda (Mr. Jones) was right to pitch this as the main concern of this side of the House. Conservative Members can have no complaints about this on the part of the Opposition, because they used the following words in their manifesto at the last election: The disastrous effect of Labour's economic policies on Wales is most starkly revealed by the record level of unemployment reached under Labour. When the Conservatives left office in February 1974, 38,000 people were unemployed in Wales; by last August the figure had climbed to 101,000, the highest total since the early months of the last war, and it seems that similar figures will be experienced again this year. Even more devastating has been the increase in unemployment among school leavers, 16,500 of whom were without jobs last summer. There can be no more depressing start for these young people than to go straight from the classroom to the dole queue. La5our blamed the world recession but the level of unemployment in Wales and the United Kingdom as a whole is far worse than in most of our major international competitors and the scale of increase has been even more severe. So said the Conservative Party manifesto for Wales.

My right hon. Friend pointed to what the Conservatives regarded as a disaster in 1979, but on which they display a degree of reticence in 1982, as is instanced by their coyness in questioning the Secretary of State about the level of unemployment in their constituencies, which, thanks to my right hon. Friend, has been put on the record. The constituents of the shrinking violets on the Government Benches will., therefore, know the extent of the fate that has befallen them because they fell fox the honeyed words spooned out to them to obtain their votes in 1979.

The Secretary of State clutched at the straw of the dip in the unemployment figures which was announced this week. We are glad to see that reduction. The right hon. Gentleman spoke about the number of inquiries received by the Welsh Development Agency. He did not tell the House that there would never have been a Welsh Development Agency to receive those inquiries had he and those of his hon. Friends who were here at the time had their way. They consistently voted against the establishment of the WDA.

There is not much straw for the right hon. Gentlemen to clutch to build bricks with which to protect the people of Wales, whether they are employed or unemployed. Unemployment in Wales is now higher than in any other part of Great Britain. There are more people out of work in Great Britain now than at any time since records began in 1886.

In Wales there are 8,041 school leavers on the unemployment register. In February 1981 there were 5,750, which was a higher level than in 1980. It is little wonder that young people lobby Parliament, as they did today. Over 68,000 are unemployed in Wales. They see the dreadful feature of this month's unemployment figures. The Opposition are horrified by them and%) the deepening phenomenon of long-term unemployment. In Wales, 49 per cent. of the unemployed have been unemployed for less than six months, 211/2 per cent for between six and 12 months, and 291/2 per cent. for more than 12 months. More than half of the unemployed in Wales have been without jobs for six months or more. That is the stark situation.

I fling the words used in the 1979 general election campaign back into the faces of right hon. and hon. Members whose policies have brought us, yet again, to this situation. It can be likened to the 1930s, in which many of us spent our childhood. We protest at the economic disadvantages suffered by the long-term unemployed. It is a disgrace that the Government are seeking to reduce the income of the long-term unemployed. However, the unemployed are affected in other ways. Their health, especially their mental health, can be affected.

Reference has been made to Glarrhyd hospital in Bridgend where it has been necessary to close much-needed facilities—the psychogeriatric ward—to make room for young psychiatric patients.

In my capacity as a magistrate I come across another aspect of unemployment. Time and time again I find that unemployment is involved in the commission of crime. We look to the Government to bring about a more realistic understanding of the effect of unemployment than is now evident.

In Wales the steel industry has taken the brunt of redundancies in the current bout of unemployment. It is to be hoped that the massive reduction in the labour force at Port Talbot and Llanwern over recent years has come to an end and that the security of the works is to be ensured. Production costs at the two works are now among the best in Europe. We look to the Government, especially to the Secretary of State, to invest in the South Wales plants so that the employment sacrifices that have been made will not have been in vain and that steel making, which is a traditional Welsh skill, will continue and prosper.

It appears that as a result of pressure, political or otherwise, by senior executives at Ductile, a Department of Industry inquiry has been instituted into the 17 works producing narrow strip with a view to rationalising the market. It appears also from information that has been obtained by Mr. John Foley, the divisional officer of the Iron and Steel Trades Confederation in Wales, that Ductile is mounting pressure for the removal of Whitehead, which is the largest and most modern BSC plant. Apparently the corporation has objected and will not accept the closure as a means of boosting the private sector. The Opposition would oppose such a move, and we look to the Under-Secretary of State to say in his reply that the Welsh Office will add its weight to preventing such interference with the future of the Whitehead plant.

We are concerned about the special problems of North Wales. A few years ago Deeside and Wrexham were relatively prosperous areas. My hon. Friend the Member for Flint, East (Mr. Jones) often reminds us of the appalling problems that face the area. I am glad that the chairman of the BSC thinks that there is a future for Shotton. I hope that we shall be told precisely what that means for production and secure employment.

The House will wish to know also what plans the Secretary of State has for the Wrexham area. Much needs to be done to restore the shattered confidence of Wrexham and its once thriving industrial estate.

On many occasions we have been reminded of the grim situation in Gwynedd. In Anglesey unemployment stands at over 22 per cent. That is intolerable. What does the Secretary of State have in mind for the people of the island? There is acute concern about current developments in the port of Holyhead. Over the years we became accustomed to hearing speeches from the previous Member for Anglesey, now Lord Cledwyn of Penrhos, about the merits and problems of Holyhead. We recall his advocacy when the Britannia bridge caught fire. The position has deteriorated since those days and now over 25 per cent. of the male population are out of work.

If the B and I Line operates from Holyhead will British Railways Sealink continue to operate and compete vigorously? Holyhead is a Sealink port, with two new Sealink ships, the motor vessels "St Columba" and "St David". They are purpose-built for the run to Dun Laoghaire. Will those ships continue to run? We need an assurance from the Secretary of State that the arrival of B and I in Holyhead will not interfere with Sealink operations.

I noted what the hon. Member for Brecon and Radnor (Mr. Hooson) said when he expressed his concern for the future status of Mid-Wales under regional policy. From my experience, which stems from the reign of the right hon. Gentleman the Secretary of State for Education and Science at the Department of Industry, I am well aware of the anxieties that are being felt in Mid-Wales over its position under regional policy. Ministers at the Welsh Office must recognise those anxieties and take action to remove them so that the people in those areas can move securely into the future.

The Secretary of State referred briefly to agriculture. We recognise the importance of agriculture in Wales and we draw attention to the difficulties in the way of young people who wish to set up in farming, because of the high level of interest charges. We are glad about the fall in interest rates this week, but the fact that they have been so high for so long, causing such problems for young people, is a direct result of the mad monetarism of the Conservative Party. Perhaps the Minister will tell the House the latest position about marginal land.

The anger expressed in Wales about the 18.3 per cent. increase in domestic water charges by the Welsh water authority must prompt comment. I hope that we shall have a comment from the Minister. Since its reorganisation in 1974 the water industry in Wales has been changing continuously. Each time such a change has taken place deficiencies in its operations have been revealed. Wales has a difficult balance between revenue and cost to overcome. The population is relatively low. The rateable value, which is the main factor in water charging, is also low. The cost structure has to overcome a difficult geography. The Welsh water authority has to be reconciled to a situation of either higher charges or reduced services, or a political solution has to be found.

Despite what the right hon. Gentleman says, the abolition of equalisation has been a significant factor in price increases. A possible political solution would be to restore a central fund which could equalise charges. An alternative political solution, which would have to be applied to all authorities, would be to write off historic debt. If that were done, it would be of considerable benefit to us in Wales. One day a Government will have to grasp the nettle and create a full nationalised water industry.

I conclude, as I began, by referring to unemployment. Despite the approach of the Conservatives at the last election, their offence against the people of Wales is that since they have been in Government more Welsh people than ever before have found themselves unemployed. Unemployment in Britain today costs the Exchequer over £12 billion a year. The Opposition's proposal for a Budget expansion of £8.3 billion for the year ahead would begin the process of restructuring the British economy. It would create an extra 677,000 jobs. It would cause registered unemployment to fall by 574,000. We say to the Government and to the people of Wales that unemployment in Britain will remain at over 3 million unless present policies are changed. We demand, in the name of our people, that the policies are changed. We promise that when the time comes we will change them.

9.36 pm

The Under-Secretary of State for Wales(Mr.Michael Roberts)

Today's debate has been as wide ranging as ever on these occasions. Several hon. Members have referred to the importance of our education service in Wales and to the problems of youth in particular. I should like to start by dealing with the crucial beginning for the future prosperity of Wales—the education and training of our young people. The hon. Member for Merioneth (Mr. Thomas) and my hon. Friend the Member for Cardiff, North (Mr. Grist) have spoken on this issue. Both have taken a considerable interest in our schools and in education over a long period, as indeed has the right hon. Member for Rhondda (Mr. Jones) who raised the matter in his opening speech. They have expressed certain reservations about the level of achievement in our schools, and I share their concern.

There is plenty of evidence of widespread underachievement in secondary schools among pupils of all levels of ability and in all subject areas. It is perhaps the most worrying issue in schools today. We can never eradicate it entirely, but we need to do all we can to reduce it. Schools can significantly influence pupil attitudes, motivation and achievements, but to do so they need to be clear about their aims and objectives, and methods of achieving them. This means looking at curricular and organisational arrangements, teaching methods and materials, and the ethos and attitudes of the school as a community.

The inspectorate in Wales has produced a paper which looks at some of the factors which contribute to underachievement and the ways in which they can be modified or eliminated. I propose to publish this as soon as it can be printed. It will be published some time next month. Thereafter, I will be discussing the issues with interested bodies and individuals.

The hon. Member for Merioneth asked that we should do something along the lines of the Mold conference of the previous Labour Administration. I do not envisage doing something exactly along those lines but, when this document is published next month, I intend to discuss it with those bodies that I think will be particularly interested. I will also be happy to discuss it with other bodies, such as the teacher unions, the WJEC, directors of education and headmasters and I will welcome those who can contribute to a debate on education and put forward their valued points of view. I hope that this document will make a significant contribution to consideration of the problem and be of great assistance to individual schools and authorities.

Opposition Members are fond of painting a gloomy picture of an education service falling apart through lack of resources. I do not object to anyone mentioning resources because that is obviously the duty of all concerned with education. However, the education service is in no way falling apart because of a lack of resources and to suggest that it is completely unhelpful to those trying to tackle the problems of educating our children. It is worth remembering that the resources devoted to education are still enormous—over half local authority current expenditure. In addition, the pupil-teacher ratio in Wales has never been better, and the recently announced rate support grant formula provides much more central Government support for Welsh than for English local authorities. There certainly have to be economies as pupil numbers fall, but the overall problem is one of making best use of the available resources rather than allocating still more without questioning whether they will be used efficiently.

As politicians, we will do our children the gravest disservice if we concentrate unduly on the arguments about resources and pretend that there was once a golden age and that, with more resources, money, buildings and books, more and bigger free school meals and even more teachers, all will be well. Truancy did not start because of economics, nor in my judgment is a lack of resources a significant factor in its growth. It is perhaps significant that the two assessment of performance unit surveys of secondary mathematics, in which the inadequacies of the Welsh performance were so clearly revealed, were carried out in 1978 and 1979. The fact that the children reported on had been educated at a time of peak spending did nothing to improve their relative performance.

I was told recently of a Cardiff boy who had done very little in school. On a school holiday in Switzerland he said to his headmaster "In school, I am no good at anything, but I put on these skis and a went across the mountains." He went all the way to Switzerland to find something he could do. That is nothing to do with resources, but it does raise the problem of the curriculum. Teaching children something that they can achieve is of value and satisfies the individual child. I am confident that we can, within the available resources, do better for our children. Through the teachers, head teachers, inspectors and parents, we can work and make some progress. To that end we should devote our energy and thought and not to a constant bickering about resources which are not infinite whatever Government are in office.

Where it can be demonstrated that there is a genuine need for additional resources, this Government have made them available, an example being the additional money made available to local authorities because of the increase in the number of applications from young people who wish to stay on in schools or colleges. The Welsh share of this additional money is £3 million in 1982–83 and larger sums have been included in our plans for later years. Their adequacy will be kept under review and it is envisaged that £4.5 million will be provided in 1983–84.

My right hon. Friend the Secretary of State mentioned the new training initiative, which has a vital part to play in equipping Welsh workers for the industries of the future. It is nonsense that in 1982 we continue to accept age restrictions that can force bright young people to choose between A-levels and apprenticeships--I know that there are not many apprenticeships but do we have to make that choice—and which prevent older people from being considered for entry into the skilled occupations at all. It is equally ridiculous to rely on time-serving rather than on the attainment of agreed standards as a measure of efficiency.

Not only the standards of skilled training but also the skills trained for need bringing up to date. We need training for the future rather than for the skills of the past—skills on which we can build and develop so that we can take advantage of the developing technologies and opportunities as they arise. We may be unable to foresee precisely which specific skills will be needed in the future, so our training arrangements need to be flexible, with considerable readaptation of the existing labour force. Wider opportunities for training and retraining of people in their twenties and thirties and later in life are needed. The resources of the training opportunities programme, currently some £250 million a year, are to be increasingly directed towards encouraging the necessary provisions and the new Open Tech proposals will play their part in this facet of our training future.

My hon. Friend the Member for Flint, West (Sir A. Meyer) asked me for some information about the Hollywell bypass. This request was echoed by Labour Members. Provided that all goes will with the outstanding statutory procedures I hope that we shall be able to start work on this important scheme late in 1984 or early 1985. The scheme will cost about £17 million.

My hon. Friends the Members for Brecon and Radnor (Mr. Hooson) and for Montgomery (Mr. Williams) and the hon. Member for Neath (Mr. Coleman) all made inquiries about the assisted area review in Mid-Wales. My right hon. Friend the Secretary of State met the chairman of the Development Board for Rural Wales recently and is well briefed on the views and experience of the board. He and the Welsh Office will be fully involved in the review which will cover other areas as well. I assure hon. Members—I know that many are interested in this question—that all the representations made by local authorities and others will be fully taken into account, including the concern about possible loss of access to European Commission funds and tourism support.

My hon. Friends the Members for Brecon and Radnor and for Flint, West both raised the important question of continued membership of the EEC. In characteristically constructive speeches they pointed out the advantages to Wales of our continued membership. In last year's Welsh debate, my right hon. Friend the Secretary of State for Wales emphasised how vitally important the continuation of EEC membership was to the industrial regeneration of the Principality.

Time has reinforced this view. Recent studies by the European League for Economic Co-operation have, for example, highlighted the importance of access to the European market of new and incoming investment, and past success in attracting such developments to the Principality, particularly American and Japanese investment, has amply demonstrated the benefits that can accrue from maintenance of a European perspective. In this context it is interesting to note that well over 50,000 people in Wales are presently employed in manufacturing units owned or controlled by foreign companies.

I can give one personal illustration of this. A few months ago I opened an extension of the 3M factory at Gorseinon in the constituency of the hon. Member for Gower (Dr. Davies). It was made clear that that extension would never have been built had it not been for the fact that we were in the EEC and that was a part of its market. [Interruption.] The hon. Member for Merthyr Tydfil (Mr. Rowlands) tempts me to go into his vacillating record of support for the EEC. At least the hon. Member for Newport (Mr. Hughes) has been consistently wrong. I am delighted to say that the Select Committee on Welsh Affairs is to study the issue of membership of the EEC. I trust that, in its great wisdom, it will remove the prejudices of some Labour Members.

I shall say a few words about the state of Welsh agriculture. The matter was raised by the hon. Member for Neath and those two great champions of agriculture, the hon. Members for Brecon and Radnor and my hon. and learned Friend the Member for Denbigh (Mr. Morgan), and of course I should not dream of leaving out that other great champion of agriculture, the hon. Member for Cardigan (Mr. Howells). I tried to make a note of all those who spoke about agriculture, and I hope that I have succeeded in mentioning them all.

The annual review of agriculture White Paper published on 17 February indicates a small 1 per cent. real increase in United Kingdom farm incomes, although it is conceded that the levels for 1980–81 are still well below the levels achieved in earlier years. The final figures of the farm management survey now available reveal a more optimistic picture of Welsh agriculture in 1980–81, in particular. Despite the effects of the severe January weather, there are signs of renewed confidence in the industry in 1982. As Government policies to reduce the level of inflation succeed and interest levels tend to fall, the foundations will be laid for a return to greater profitability in the industry, to a reduction in the level of its indebtedness, and a resumption of investment—which is, of course, the key to continuing productivity.

The right hon. Member for Rhondda and others spoke about the implications for health and personal social services of unemployment. The matter was mentioned by many right hon. and hon. Members today. The right hon. Gentleman referred to the report of the joint working party of directors of social services and the Welsh Office. This was designed to review the existing body of research studies on the social consequences of unemployment. It concluded that the implications for the social services could not be assessed with any accuracy. Some very tentative financial conclusions were derived from American statistical studies, but the basis of these has been questioned by subsequent research in Britain.

The stress, frustration, false sense of failure, unjustified feeling of inadequacy and consequent ill health that can sometimes develop is an individual and not a collective occurrence. I recognise the right hon. Member's concern. I share it. I am sure that the right hon. Gentleman regrets that we were not as aware of it four years ago when unemployment was over 100,000 in Wales. It is not a new problem. It has, alas, always been with us.

What has compounded the effect of the recession in this country has been the failure of past Governments to get to grips with the basic problems of overmanning and a willingness to turn a blind eye to pay increases not matched by improvements in productivity. Wales has suffered too from the special problems arising from the restructuring of some of our basic industries and the need to vary our industrial base. In Wales too, as elsewhere, we have had to face the widening of the Labour market, including the number of women wishing to take up or return to employment.

The hon. Member for Neath quoted many statistics. I too could use statistics, not to prove a case but just to show that anyone can use them. A greater proportion of people are working in Britain than in almost any country in the world, but that does not alleviate the problem. Sometimes we throw out statistics but we forget about the individual who suffers.

I shall say a word about some of the causes of unemployment. Unemployment and jobs properly dominated the debate. Concern was correctly expressed, but right hon. and hon. Members opposite, if they were strong on compassion, as, indeed, they were, failed on analysis. The decline in employment levels in all industrialised countries in recent years gives the lie to the argument that unemployment is somehow the consequence of the Government's efforts to tackle our basic economic problem.

Against that background, there are good indications for the future—the rate of decline in employment has slowed, short-time working levels in manufacturing have decreaseds the incidence of overtime worked in manufacturing has increased and monthly redundancies figures have dropped.

It is reasonable and fair to say that the majority of the speeches made by Labour Members were critical but lacking in much constructive thought. There was considerable passion and I respect what the hon. Member for Swansea, East (Mr. Anderson) said about young people not even developing the habit of going out to work and how debilitating and frustrating that must be. However, when the hon. Gentleman and others quoted figures for massive reflationary packages, they did not even try to assess the inflationary effect, if any, of the proposals that have been put before the House.

There is nothing in the background, the experience or the character of the hon. Members opposite which for one moment would support in the minds of a fair-minded observer their assumption that only they care for the plight of the unemployed and that Members on this side of the House do not. I must tell the hon. Member for Ogmore (Mr. Powell) that I find it deeply insulting that he suggests that it should be so.

Mr. Alec Jones

Will the Minister give way?

Mr. Roberts

I shall not give way.

Mr. Jones

rose——

Mr. Speaker

Order. It is quite clear that the Minister is not giving way.

Mr. Roberts

I apologise to the right hon. Gentleman, but it is fairly late in the day.

Mr. Jones

The right hon. Gentleman should have started earlier instead of waffling on about that rubbish.

Mr. Roberts

I am very sorry that my references to education are regarded as waffle by the right hon. Gentleman. He is in no position to talk about it.

Mr. Jones

rose——

Mr. Speaker

Order. I know that this is a Welsh debate, but we must have only one hon. Member on his feet at any time.

Mr. Roberts

Education is not unimportant.

As for SDP Members, there have been too many blinding conversions on the road to constituency reselection meetings for them to cut any ice at all. However, what unites them with their former colleagues is a political opportunism that transcends compassion and care for the unemployed. At least today we know where the SDP stands in Wales and we know its programme to solve our unemployment problems. The right hon. Member for Rhondda was told by the hon. Member for Wrexham (Mr. Ellis), but perhaps he did not listen, that the SDP will ignore economic factors and will turn to the political message. It will have a Parliament for Wales, the very thing that the people of Wales rejected so completely only three years ago. At least we know what its remedy is for solving unemployment.

Meanwhile we are trying to provide an excellent infrastructure. Every local authority brochure, including that for Mid-Glamorgan, tells us that that is so. The traditional industries such as steel are emerging revitalised and competitive. We are attracting new industries based on modern technology——

Mr. Jones

And the highest level of unemployment for 30 years.

Mr. Nicholas Edwards

I expect that the right hon. Gentleman has been drinking.

Mr. Jones

rose——

Mr. Roberts

Those industries are based on modern technology. Mitel and Inmos and all the companies that are coming——

It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.